House rollback of banking rules sent to Trump

The House sent a major revisionof banking regulationsto President Trump’s desk on Tuesday after conservatives who wanted a more sweeping rollback decided to accepta bipartisan deal crafted by the Senate.

Supporters said the billwould give businesses more access to loans for homes and cars that they cannot get now because of government regulations. Critics saidthe measurewould thwart efforts to fight discriminatory lending, and increase the risk offuture bank failuresand bailouts.

The bill, passed the Senate in March with 67 votes, including 17 from moderate Democrats. Itwould roll back some of the mandates imposed on banks in the 2010 regulatory overhaul lawknown as Dodd-Frank, which wasenacted in response to the 2008 financialcollapse.

The House vote for passage was 258-159, with just 33 Democrats supporting it and one Republican opposed.

This is a bill for the small banks that are the financial anchors of our communities,” House Speaker Paul Ryan, R-Wis., said at a news conference. “It addresses some of Dodd Franks biggest burdens.

Rep. Nancy Pelosi, D-Calif., countered thatthe bill would take the country “back to the days of unchecked recklessness.”

“Its a bad bill under the guise of helping community banks,” Pelosi said.

Consumer provisions would allow people to freeze and unfreeze credit reports without paying a fee; giveactive-duty members of the military free credit monitoring;and prevent student loan lenders from declaring a loan in default because a co-signer dies or declares bankruptcy.

Rep. Maxine Waters, D-Calif.,complained that thebill does nothing to address data breaches at companies such as Equifax, and could end up steering more work to them.

Critics also railed against the repeal of a mandatethat small mortgage lenders disclose data such as origination fees, interest rates, and debt-to-income ratios.

In a letter urging Democrats to oppose the bill, Waters and Pelosi said disclosing the data “can help expose the most insidious lending discrimination against people of color and redlining of vulnerable communities.”

Rep. BlaineLuetkemeyer, R-Mo., said the largest banks that write the most mortgages would still be subject to the disclosure rules. He and other Republicans also said the bill would free banks up to do more lending to small businesses.

House Republicans had wanted to go further in rolling back Dodd-Frank, but relented because they were told changes would have jeopardized adeal Senate Republicans reached with moderate Democrats to get the bill passed in that chamber.

“I wish it did gut Dodd-Frank,” Rep. Jeb Hensarling, R-Texas, said inmocking Democratcomplaints the bill would be a boon for megabanks. “It didn’t. “

Dodd-Frankclassifiedall banks with assets worth more than $50 billion as “systemically important financial institutions” subject to enhanced regulation by the Federal Reserve that could include bigger reservesto absorb losses, and “living will”plans to deal with apotential failure.

Under the bill, those restrictions would only be mandatory forinstitutions with assets worth more than $250 billion. The change would ease regulations on more than two dozen financial companies, including BB&T Corp., Sun Trust Banks Inc. and American Express, according to The Associated Press.

The Fed would continue to regulate banks with assets between $50 billion and $250 billion, but could no longer charge fees for the work, a change that would reduce revenues by $470 million over the next 10 years, according to the Congressional Budget Office.

TheCBO also saidthe probability of bank failures, which is “small” under Dodd-Frank, “would be slightly greater under the legislation.”

Banks with assets below $10 billion would be subject to simplified regulations. They would be freed, for example, from the so-called Volcker Ruleand couldinvest capital in riskier products, though CBO predicted “most of them would not make significant changes to their management or business practices.”

“This represents a return to relationship banking, where lenders can tailor products specifically to the needs of a customer,” said Rep. Andy Barr, R-Ky.

Contributing: Deirdre Shesgreen

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