SenateÕ passage of Dodd-Frank reform: Needed relief or the beginning of the end?

Experts disagree

After the Senate passed its Dodd-Frank reform bill Wednesday night, sending it to the House to be voted on, experts began to voice their opinions of the bill – but no one agrees.

While some experts claim this bill, the Economic Growth, Regulatory Relief and Consumer Protection Act, is a major step in the wrong direction, and puts the market at risk of another collapse such as that seen in 2007, others say it brings common sense regulatory relief.

“It’s very hard to watch the Senate vote to ignore the painful lessons from the causes of the Great Recession 10 years ago,” said Mike Litt, U.S. PIRG consumer campaign director. “The warning signs are plain to see.”

“There is a strong chance this bill will increase mortgage fraud, racial discrimination, and risky banking practices,” Litt said. “It’s not worth all that risk when profits and loans for banks of all sizes are up right now. And to add insult to injury, why are the credit bureaus getting a break in this bill six months after the Equifax data breach?”

However other experts said just the opposite, even thanking the Senate for its hard work in passing the bill.

“The Senate's passage of this bill is a great first step, as one of the greatest challenges facing the credit union industry is unnecessary, burdensome regulation,” said Dan Berger, National Association of Federally Insured Credit Unions president and CEO. “NAFCU and our members sincerely thank Senate Banking Committee Chairman Mike Crapo and his Democratic colleagues for crafting bipartisan legislation to address this worrisome trend, and the senators on both sides of the aisle who voted in favor of it.”

“Americans deserve access to safe, affordable financial products, and this legislation would help create a regulatory environment in which credit unions can more easily deliver those services to their 111 million members,” Berger said.

In fact, many members of the housing industry are in favor of the bill, and even urging the House to quickly vote on the bill.

“We commend Chairman Crapo, Senator Tillis, and Senator Warren for working together to include the text of the Protecting Veterans from Predatory Lending Act of 2018 in the Senate’s final bill,” NewDay USA Executive Chairman Thomas Lynch said. “As this bill moves over the House of Representatives, we strongly encourage Speaker Paul Ryan and Financial Services Committee Chairman Jeb Hensarling to pass this legislation swiftly into law so that all veterans and active-duty service members can access their VA home loan benefits in a safe marketplace.”

Builders also expressed their support for the bill, commending the Senate on its passage.

“Passage of S. 2155 represents a bipartisan breakthrough that will bring much-needed regulatory relief to regional and community banks and ease tight credit constraints that have hurt home buyers and home builders alike,” said Randy Noel, National Association of Home Builders chairman. “We commend the Senate for passing this legislation that will eliminate some of the barriers to credit availability and support a stronger, more robust recovery of the housing and mortgage markets.”

But the National Community Reinvestment Coalition, which works with community leaders, policymakers and financial institutions to champion fairness in banking, housing and business, cautioned strongly against the bill.

“The Congressional Budget Office has already reported that this bill increases the risk of bank bailouts and provides relief for banks already bailed out in the Great Recession,” NCRC President and CEO John Taylor. “I am afraid allowing financial institutions to circumvent rules with this new bill is an open invitation to the banks to resume their risky business. That will create new risks for borrowers and our entire financial system.”

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