The US Senate appears poised to ostensibly ease regulatory restrictions on local banks. The plan is to roll back many of the regulations introduced after the financial crisis of 2008. Of course, trying to figure out exactly what the Senate is really doing and how that will affect local banks is tricky, given the voluminous nature of the legislation involved in the process.
A key U.S. Senate panel has cleared a bill that could bring financial firms a significant chunk of the regulatory relief they’ve sought since the Dodd-Frank Act became law in 2010.
Bipartisan legislation advanced Tuesday by the Senate Banking Committee would revise many parts of the sweeping 2010 overhaul, particularly those pertaining to small and regional banks. It would free midsize lenders from some of the strictest post-crisis oversight and cut compliance costs for community banks. It also includes some tweaks that Wall Street has sought, including a change to how banks classify municipal bonds.
The bill sponsored by Senator Mike Crapo, the Idaho Republican who leads the banking panel, has backing from several Democrats. That support from across the aisle means the proposal represents the financial industry’s best hope in years of dialing back rules that it blames for inhibiting lending and needlessly increasing the cost of doing business.
“The underlying goal of the legislation is one I have long advocated: easing the burden for the banks that pose less risk and cost to the financial safety net and ultimately to the taxpayer while enabling stronger economic growth,” Federal Deposit Insurance Corp. Vice Chairman Thomas Hoenig said in a statement in which he proposed refinements that lawmakers should consider.
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