The Senate passed a motion Tuesday to proceed to debate on a bill that would overhaul major parts of the Dodd-Frank Act and is expected to vote on the bill at some point this week.
Late last year the Economic Growth, Regulatory Relief and Consumer Protection Act, which was sponsored by Banking Committee Chairman Mike Crapo, R-Idaho, with nearly 20 co-sponsors on both sides of the aisle, was introduced in the Committee on Banking, Housing and Urban Affairs.
The Center for Responsible Lending, a nonpartisan, nonprofit organization dedicated to fighting predatory financial practices, explained the bill is likely to pass in the Senate due to its bipartisan support.
The bill contains policies which would roll back or eliminate key parts from the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Among other changes, the bill would allow some smaller and mid-sized banks to omit their cash balances held at the Federal Reserve and other central banks when calculating their supplementary leverage ratio, or what determines how much capital they need to hold.
However, some critics argue it could also allow larger banks such as Citibank and JPMorgan Chase to adjust their calculations as well.
One estimate shows the bill would exempt about 85% of banks and credit unions from key reporting requirements, such as reporting data under the Home Mortgage Disclosure Act.
“Instead of threatening the American economy with one gallon of poison or two, Congress should choose neither,” CRL Senior Legislative Counsel Yana Miles said. “Our elected representatives should listen to the American people and make another crisis less, not more, likely.”
However, the majority of the housing industry voiced its support for the bill, declaring the bill will bring regulatory relief to the industry.
“CUNA, leagues and credit unions have been advocating for common-sense regulation for over a year and today's crucial vote in the Senate means we're one step closer to relief for main Street,” said Jim Nussle, Credit Union National Association president and CEO. “Our voices helped get this bill to the floor, and now it's time for Congress to fight for the 110 million Americans who depend on their credit union.”
“S.2155 is bipartisan legislation that will protect seniors from elder abuse, make mortgage processing easier and quicker, increase affordable rental housing in our communities and help credit unions provide better service to their members, common-sense solutions that will benefit consumers,” Nussle said.
And other members of the housing industry agreed.
“Regulatory burden is the top challenge facing credit unions today,” said Carrie Hunt, National Association of Federally Insured Credit Unions executive vice president of government affairs and general counsel.
“Reducing burdensome and unnecessary regulatory compliance costs is the only way for credit unions to thrive and continue to provide their member-owners with basic financial services and the exemplary service they need and deserve,” Hunt said. “NAFCU believes that credit unions must have a positive regulatory environment that allows them to succeed.”
Others, including the Mortgage Bankers Association, the National Association of Home Builders and the Independent Community Bankers of America, previously voiced its support for the bill. Read more about that, here.