Seventeen Senate Democrats joined with Republicans Tuesday to advance a bipartisan regulatory relief bill for the banking industry, an early sign that the bill can clear the Senate in the coming days.
The Senate voted 67-32 to end debate on a motion to proceed to the bill, more than the 60 votes needed for that procedural vote.
The bill, S. 2155, is advertised as regulatory relief for community and regional banks. Led by Banking Committee chairman Mike Crapo, R-Idaho, the bill is supported by centrist Democrats like Mark Warner of Virginia, and Democrats running for re-election in Trump states, like Jon Tester of Montana and Heidi Heitkamp of North Dakota.
The Democrats thought to be positioning themselves for presidential runs, including Kirsten Gillibrand of New York and Kamala Harris of California, voted “no.”
On Tuesday, more Democrats joined to advance the bill, including Chris Coons of Delaware, Debbie Stabenow of Michigan, Maggie Hassan and Jeanne Shaheen of New Hampshire, and Bill Nelson of Florida, as well as Angus King of Maine, an independent who caucuses with Democrats.
“This is a modest but critical bill,” said Senate Majority Leader Mitch McConnell, R-Ky. “By streamlining regulations, it will bring relief to the small financial institutions who have been hurt by Dodd-Frank’s one-size-fits-all approach.”
But liberal Democrats, led by Elizabeth Warren of Massachusetts, have charged that the bill would invite another financial crisis by loosening regulations on big banks, and that the Republicans and Democrats who support the bill are doing the bidding of lobbyists contrary to the public interest.
The legislation would be the most significant legislative revision to the Dodd-Frank financial reform law since former President Barack Obama signed it in 2010. Nevertheless, it is much more modest than the wholesale replacement of Dodd-Frank sought by President Trump and House Republicans.
The most significant provision of the bill is an increase in the size threshold at which banks are subjected to stricter oversight by the Federal Reserve. Today, banks with more than $50 billion in assets face the tougher regulation. The Crapo bill would raise the threshold to $250 billion, providing relief for regional banks like Suntrust and Fifth Third Bank.
Those banks present themselves as essentially big community banks, without the size or complexity of megabanks.
Liberal critics, however, have said that those banks, too, could pose a threat to the financial system if they failed, and say other provisions of the bill would aid bigger banks like JPMorgan Chase and Citigroup.
The bill’s other provisions are a grab-bag of revisions long sought by banks. Under the bill, smaller banks would get relief from new mortgage regulations for home loans they held in their own books, and would mostly escape the “Volcker Rule” that prevents banks from speculating with deposits backed by the government.
Trade groups representing banks and credit unions support the bill, as do free-market groups.
