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The House passes bank reform bill

May 23, 2018

  You might have missed this yesterday with all of the distractions being thrown out by the mainstream media but the House passed a bank bill which will ease some of the Federal regulations imposed by the Dodd-Frank legislation in the wake of the 2008 financial crisis.

  Here is more:

The House on Tuesday passed a bill to loosen federal regulations on the banking sector, securing an election-year legislative accomplishment that is likely to be touted by members of both parties.

The 258-159 House vote sends the bill to President Trump, who has pledged to sign it.

“We’ve been losing a community bank or credit union every other day in America, and with it the hopes and dreams of millions,” said Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee. “But today, that changes. Help is on the way.”

The legislation represents the first significant overhaul of the banking rules passed by a Democratic Congress in the aftermath of the 2008 financial crisis.

While the legislation falls well short of Trump’s campaign pledge to “dismantle” Dodd-Frank, it also includes significant changes to the law that have long been sought by U.S. banks and credit unions.

  While several vulnerable Democrats in districts Donald Trump won in 2016 were co-sponsors of the legislation this drew the ire of Democratic leaders:

“The American people paid a very high price for the weak oversight and discriminatory lending practices that culminated in the 2008 financial crisis,” Pelosi and Waters wrote. “We must not allow the GOP Congress to drag us back to the same lack of oversight that ignited the Great Recession.”

  Donald Trump promised to dismantle Dodd-Frank and according to the above-linked article this leaves most of it in place with some changes:

The final compromise will leave most of Dodd-Frank in place for the foreseeable future, while still providing benefits for all but some of the largest U.S. banks.

The measure will exempt dozens of regional banks from tighter regulation by raising the threshold for closer Fed oversight from $50 billion to $250 billion in assets. That frees several major regional banks, including M&T, Citizens, SunTrust, BB&T, Fifth Third and BMO Financial Corp., from some of Dodd-Frank’s strictest requirements.

Banks below the new $250 billion threshold will no longer be automatically subject to yearly Federal Reserve stress tests or higher capital requirements meant to ensure large firms are able to weather severe financial crises.

Those banks below the threshold will also be exempted from submitting a “living will” for Fed approval — a plan that outlines how a bank’s assets could be liquidated upon the firm’s failure without causing a widespread meltdown.

  There are also a couple of other changes designed to help smaller banks and credit unions which only deal with a small volume of mortgages. But for the most part, as I wrote above, Dodd-Frank mostly remains in place and that includes the Consumer Financial Protection Bureau.

malo periculosam libertatem quam quietum servitium

7 Comments leave one →
  1. Brittius permalink
    May 23, 2018 8:13 am

    Reblogged this on Brittius.

    Liked by 1 person

  2. petermac3 permalink
    May 23, 2018 10:18 am

    First these congressional clowns allow the printing of Monopoly money, create insane lending programs in order to lend it to those who buy inflated assets (real estate) knowing the borrowers can’t pay it back, investors buy the securities (bundled mortgages) with money borrowed for nearly nothing from the Fed, the securities become worthless loaded with foreclosed mortgages, investment firms go bust, the banks can’t sell off the foreclosed properties anywhere near the inflated prices homeowners purchased them for and…bam. Then these same scoundrels who created this housing debacle, blameless of course, rude in on their white horses and we end up with horse shit. A simplistic microcosmic overviews of what this government and its lobbyists are capable of.

    Liked by 1 person

    • May 23, 2018 7:10 pm

      We keep expecting the same people who created the problem to solve the problem and it just keeps going round and round.


  3. May 23, 2018 4:29 pm

    The sad part was the loss of so many community banks…they tried so hard to stay afloat.. First joining regionally then ended up for the most part absorbed by the big guys.
    There was a time one got dressed up and went to see the President of the bank or a VP and talked. He/she would size you up, and for the most part one would get the loan. That is how local businesses survived where I lived.
    Now nameless faceless computers deciding the outcome of the quality of ones soul.

    Liked by 1 person

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