More on the Banking Bill

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.

The bill was opposed by only one Republican, Rep. Walter Jones (R-N.C.), while 158 Democrats voted against it. Thirty-three Democrats broke ranks to loosen the Dodd-Frank Act of 2010, enacted by former President Obama and defended by his party for close to a decade.

“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.”

Why it matters: 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.

For smaller firms, the bill exempts banks that extend 500 or fewer mortgages a year from reporting some home loan data to federal regulators under anti-discrimination laws. The bill also broadens the definition of qualified mortgages.

Other aspects of the legislation meant to bolster community banks and credit unions include loosening appraisal requirements for certain mortgage loans and exempting firms with less than $10 billion in assets from the Volcker Rule. Named after former Fed Chairman Paul Volcker, the rule bans banks from making risky trades with their own assets.



  • “We must not allow the GOP Congress to drag us back to the same lack of oversight that ignited the Great Recession.” — House Minority Leader Nancy Pelosi and House Financial Services Committee ranking Democrat Rep. Maxine Waters.
  • “This is a moment years in the making.” — Senate Banking Chairman Mike Crapo (R-Idaho).
  • “By unraveling some of the suffocating regulatory burdens community banks face, they are better able to unleash their full economic potential.” — Independent Community Bankers of America president and CEO Rebeca Romero Rainey.
  • “Deregulating 26 of the largest 40 banks is dumb, unnecessary and poorly-timed.” — Better Markets president and CEO Dennis Kelleher.
  • “While it contains some provisions that every House Democrat has supported, the roll backs to Dodd Frank cannot be justified.” — Rep. Carolyn Maloney (D-N.Y.)
  • “When the extremes on both sides of the aisle tried to derail our efforts, we bucked partisan politics and instead found common ground.” — Sen. Jon Tester (D-Mont.)
  • “It was time to tackle one of the greatest challenges facing the credit union industry – unnecessary, burdensome regulations.” — National Association of Federally-Insured Credit Unions (NAFCU) president and CEO Dan Berger.
  • “It’s hard to watch Congress ignore the painful lessons of the Great Recession.” — Mike Litt, consumer campaign director at U.S Public Interest Research Groups
  • “While this bill does not include everything Democrats wanted nor everything Republicans wanted, I’m proud of my colleagues for putting differences aside.” — Sen. Mark Warner (D-Va.).


What comes next: Trump will likely host a signing ceremony for the bill within the next few days, and a senior administration official told reporters Tuesday he’s aiming to get it done before Memorial Day. The official didn’t say if Trump would host Senate Democrats who supported the bill at the event, noting that invitations haven’t been sent yet.

The House and Senate will also continue talks over the undetermined package of House bills that Senate GOP leaders have pledge to put up for a vote.

It’s unclear which House bills will be taken up by the Senate, how they will appear on the floor and whether the measures have a chance of reaching Trump’s desk.

The House bills from Hensarling aren’t expected to pass the Senate on their own, but GOP leaders have privately floated attaching them to must-pass legislation.

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