Senate panel moves forward with bill to roll back Dodd-Frank

Senate panel moves forward with bill to roll back Dodd-Frank
© Getty Images

Republicans and a block of moderate Democrats advanced on Tuesday significant proposed changes to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

The Senate Banking Committee approved by a 16 to 7 vote a sweeping bill that would exempt dozens of banks from Dodd-Frank and loosen the rules imposed after the financial crisis on smaller firms.

Banking panel members from both parties sought to strike a bipartisan deal that would win the approval of both Chairman Mike CrapoMichael (Mike) Dean CrapoThe Energy Sector Innovation Credit Act is an industry game-changer The 19 GOP senators who voted for the T infrastructure bill Wyden asks White House for details on jet fuel shortage amid wildfire season MORE (R-Idaho) and ranking member Sherrod BrownSherrod Campbell BrownCentrist state lawmaker enters Ohio GOP Senate primary The Trojan Horse of protectionism Advocates call on top Democrats for 0B in housing investments MORE (Ohio).

ADVERTISEMENT

After talks between Crapo and Brown collapsed in October, Crapo and the committee’s Republicans joined with nine Democrats to sponsor the Economic Growth, Regulatory Relief and Consumer Protection Act.

The bill would raise the asset threshold at which a bank holding company is considered a “systemically important financial institution” (SIFI) from $50 billion to $250 billion, and exempt all banks with less than $100 billion in assets from federal stress tests immediately.

Democrats sponsoring the bill include Banking Committee members Sens. Joe DonnellyJoseph (Joe) Simon DonnellyRepublicans may regret restricting reproductive rights Sanders traveling to Iowa, Indiana to pitch Biden's spending package Supreme Court battle could wreak havoc with Biden's 2020 agenda MORE (Ind.), Heidi HeitkampMary (Heidi) Kathryn HeitkampWashington's oldest contact sport: Lobbyists scrum to dilute or kill Democrats' tax bill Progressives prepare to launch counterattack in tax fight Business groups aim to divide Democrats on .5T spending bill MORE (N.D.), Jon TesterJonathan (Jon) TesterDemocrats say Biden must get more involved in budget fight Senate backers of new voting rights bill push for swift passage The Hill's 12:30 Report - Presented by Facebook - Polls open in California as Newsom fights for job MORE (Mont.) and Mark WarnerMark Robert WarnerDemocrats confront 'Rubik's cube on steroids' Advocates call on top Democrats for 0B in housing investments Democrats draw red lines in spending fight MORE (Va.), along with Sens. Joe ManchinJoe ManchinPelosi says House members would not vote on spending bill topline higher than Senate's To reduce poverty, stop burdening the poor: What Joe Manchin gets wrong about the child tax credit Overnight Health Care — Presented by Indivior —Pfizer: COVID-19 vaccine safe for young kids MORE (W.Va.), Claire McCaskillClaire Conner McCaskillRepublicans may regret restricting reproductive rights Sunday shows preview: States deal with fallout of Ida; Texas abortion law takes effect Giuliani to stump for Greitens in Missouri MORE (Mo.), Tim KaineTimothy (Tim) Michael KaineDemocrats confront 'Rubik's cube on steroids' Overnight Energy & Environment — Presented by Climate Power — Emissions heading toward pre-pandemic levels The Hill's Morning Report - Presented by National Industries for the Blind - What do Manchin and Sinema want? MORE (Va.) and Gary PetersGary PetersHillicon Valley — Presented by Xerox — Democrats press FTC to resolve data privacy 'crisis' Democratic senator requests tech company policies on extremist content FreedomWorks misfires on postal reform MORE (Mich.), and independent Sen. Angus KingAngus KingRep. Tim Ryan becomes latest COVID-19 breakthrough case in Congress Senate backers of new voting rights bill push for swift passage Stacey Abrams backs Senate Democrats' voting rights compromise MORE (Maine). Sens. Tom CarperThomas (Tom) Richard CarperThe Hill's Morning Report - Presented by AT&T - US speeds evacuations as thousands of Americans remain in Afghanistan Biden finds few Capitol Hill allies amid Afghanistan backlash Trains matter to America MORE and Christopher CoonsChris Andrew CoonsBiden threatens more sanctions on Ethiopia, Eritrea over Tigray conflict Senate Democrats to Garland: 'It's time to end the federal death penalty' Hillicon Valley: Cryptocurrency amendment blocked in Senate | Dems press Facebook over suspension of researchers' accounts | Thousands push back against Apple plan to scan US iPhones for child sexual abuse images MORE (D-Del.) said Tuesday they will also support the bill.

The deal has enough support to overcome a Democratic filibuster, and House Financial Services Committee Chairman Jeb HensarlingThomas (Jeb) Jeb HensarlingLawmakers battle over future of Ex-Im Bank House passes Ex-Im Bank reboot bill opposed by White House, McConnell Has Congress lost the ability or the will to pass a unanimous bipartisan small business bill? MORE (R-Texas) said he’s willing to work with Crapo on a version that could pass the lower chamber.

But the bill is based on a fragile bipartisan balance. The coalition consists of Republicans eager to make whatever rollbacks they can to Dodd-Frank and moderate Democrats up running for reelection in states that supported President Trump in 2016.

Both groups say they’re eager to pare back what they call Dodd-Frank’s excessive burdens on smaller banks while proving to the fractured United States that productive compromise is possible.

ADVERTISEMENT

A group of liberal Democrats opposed to the bill, including Brown, offered a slew of amendments that the sponsoring coalition voted down.

They offered amendments intended to relieve student loan defaulters, target relief for smaller banks, hold credit reporting agencies to tighter standards and bolster protections for military members abroad.

While some of the Democratic amendments to tighten Dodd-Frank’s oversight of major banks won’t see action, Crapo said several of the defeated amendments could be added to the bill later with changes that would keep the bill passable.

“The bill we are marking up today is the product of a thorough, robust process, and honest, bipartisan negotiations,” Crapo said.

“All of the sponsors have worked in good faith to include provisions from those who have offered them, including those who do not support the bill. And we will continue to do so after this markup.”

Brown said he hoped he would have been able to strike a deal with Crapo, but that the bill rolls back too many critical Dodd-Frank rules that underpin financial stability. He also expressed concerns that Trump’s nominees to federal regulators would take advantage of looser rules and threaten the economy with lax oversight.

“I support providing some relief to small banks and credit unions, but I think this bill unwisely chooses to do so by rolling back protections for people from the very activities that led to the crisis,” Brown said.

“There’s nothing to help people with record-high levels of student loan debt; nothing to help those with underwater mortgages; and nothing to help workers who are struggling to get by.”

Liberals claimed the bill was little more than a wish list for bank lobbyists meant to boost a financial sector already reaping record profits. 

Sen. Elizabeth WarrenElizabeth WarrenDemocrats confront 'Rubik's cube on steroids' The Trojan Horse of protectionism Federal Reserve officials' stock trading sparks ethics review MORE (D-Mass.) said she was “disturbed” that her colleagues would consider rolling back financial rules amid the series of scandals exposed at banks such as Wells Fargo.

She, along with Brown, Democratic Sens. Brian SchatzBrian Emanuel SchatzHotel workers need a lifeline; It's time to pass The Save Hotel Jobs Act Equilibrium/Sustainability — Presented by The American Petroleum Institute — Scientists potty train cows to cut pollution Conservation group says it will only endorse Democrats who support .5T spending plan MORE (Hawaii), Catherine Cortez Masto (Nev.) and Chris Van HollenChristopher (Chris) Van HollenBottom line Spendthrift Democrats ignore looming bankruptcy of Social Security and Medicare Progressive pollster: 65 percent of likely voters would back polluters tax MORE (Md.), Jack ReedJack ReedTop Republican: General told senators he opposed Afghanistan withdrawal We have a plan that prioritizes Afghanistan's women — we're just not using it This week: Democrats kick off chaotic fall with Biden's agenda at stake MORE (R.I.) and Bob MenendezRobert (Bob) MenendezDemocrats reject hardball tactics against Senate parliamentarian  Biden threatens more sanctions on Ethiopia, Eritrea over Tigray conflict Failed drug vote points to bigger challenges for Democrats MORE (N.J.) opposed the bill and supported several failed Democratic amendments.

Moderate Democrats backing the bill fiercely defended the deal and the means through which it was negotiated. They insisted that the bill would provide meaningful regulatory relief for small, rural banks and credit unions that were facing record levels of consolidation.

“This is going to allow working families to get loans and buy homes,” said Tester, who is up for reelection in 2018 in a state Trump won handily.

“I guarantee you that without this bill the only people that we would be empowering are the big banks.”

Heitkamp, also facing a tight reelection next year, said: “There’s not everything that I would want if I could write this bill and force you all the vote for it.”

But “what people are going to see from this committee room is that this body can function,” Heitkamp added. “That’s something this country desperately needs.”