A bipartisan group of U.S. senators has agreed to lift some of the financial regulations placed on regional banks following the 2008 financial crisis, according to a Monday (Nov. 13) report by the Wall Street Journal.
The collaborative effort is seen as the biggest move to date for the 2010 Dodd-Frank law.
Senators involved in the agreement included Republicans led by Senate Banking Committee chairman Mike Crapo of Idaho and a group of moderate Democrats. The deal would exempt banks with as many as $250 billion in assets from the oversight of the Federal Reserve.
Currently, banks earning more than $50 billion face Federal Reserve oversight, the report noted. If the legislation is passed, the number of banks that must comply with the law would be reduced to approximately 12 compared to the roughly 40 as it stands today.
The WSJ also noted banks with between $100 billion and $250 billion in assets would become exempt from the rules after a year-and-a-half, and the Federal Reserve would be given the authority to exempt regional banks ahead of that 18-month time frame.
While the Dodd-Frank legislation is expected to receive backing from enough Republicans and moderate Democrats that it should eventually pass the Senate, it doesn’t have the support of a progressive arm of Democrats including Ohio State Senator Sherrod Brown, the ranking Democrat on the panel.
The legislation is expected to include additional provisions, such as one aimed at credit scoring companies in the wake of the Equifax hack. The well-known cyberattack left more than 145.5 million U.S. customers’ personal information exposed. With the financial regulation in place, the credit bureaus would be required to freeze and unfreeze consumers’ credit for free once per year.
Another provision will help community banks by allowing them to adhere to simpler capital requirements, giving them more flexibility in engaging in residential mortgage lending, according to the WSJ report.