The Senate on Wednesday passed a significant overhaul of banking regulations, but the bipartisan legislative package faces an uncertain reception in the House.
The upper chamber voted 67-31 to ease many banking rules that apply to community banks, and allows for some regional banks, such as Atlanta’s SunTrust and Cincinnati’s Fifth Third Bank, to no longer be categorized with Wall Street megabanks for some oversight purposes.
Yet the bill’s fate beyond the Senate is uncertain.
House Financial Services Committee Chairman Jeb Hensarling, the key negotiator on the bill for House Republicans, said Wednesday that he would seek a joint House-Senate conference.
“We want to make sure we go to conference,” the Texas conservative said in an appearance on CNBC. “I’m a little surprised that anyone would have thought anything else.”
Changes made by House Republicans could endanger Democratic support for the carefully negotiated Senate bill.
Sen. Elizabeth Warren, D-Mass., hammered the bill on the Senate floor and through social media over the past two weeks, and at points criticized her Democratic colleagues who support it. She and other liberals have characterized the bill as a favor for Wall Street banks that will come at the expense of financial stability.
Supporters have maintained that the legislation wouldn’t allow big banks to take on more risks, and that it is narrowly targeted to aid community banks.
“We knew these attacks were coming,” Crapo, R-Idaho, said on the Senate floor Wednesday in response to criticism from Sen. Sherrod Brown, D-Ohio.
“This bill is a bill designed to protect community banks and credit unions, and that’s why we have such bipartisan support for it,” Crapo said.
The challenge, though, is whether the prospect of House Republicans making changes to the bill would doom or delay its passage.
House Republicans last year passed partisan legislation mostly replacing the 2010 Dodd-Frank law with a conservative framework. They also have passed several dozen smaller bipartisan regulatory relief bills, which Hensarling said should be considered with the Senate bill.
