A coalition of regional banks asked the top Republican and Democrat on the Senate Banking Committee to release them from the stricter regulations aimed at capturing megabanks that pose a “too big to fail” threat to the country.
The Regional Bank Coalition asked committee Chairman Mike Crapo of Idaho and top Democrat Sherrod Brown of Ohio on Thursday night to replace the Dodd-Frank cut-off for big banks, set at $50 billion in assets, with a calculation of the actual threat posed to the financial system by individual banks.
The group represents banks such as PNC, BB&T and Fifth Third. While those regional banks are grouped with Wall Street megabanks in terms of regulation, they have lobbied to be taken out of that category. Rather than being megabanks, they say, they play a role more similar to that of community banks that just happen to be bigger.
They favor a bill previously advanced in the House by Rep. Blaine Luetkemeyer, R-Mo., that would get rid of the $50 billion threshhold. Instead, an existing super-group of regulators empowered to identify non-bank financial firms as potential threats would be responsible for judging whether banks need to be regulated like megabanks. The bill would require the regulators to base that decision on a mix of factors beyond mere size, including its interconnectedness, complexity and cross-border activities.
Crapo and Brown have asked for legislation that could boost economic growth and have started the year with a focus on seeking possible bipartisan bills.
The regional banks’ request might be one that could find traction. Brown, a top critic of financial industry practices, has said in the past that he thinks the $50 billion threshold is too low.
A version of Luetkemeyer’s bil passed the House in December, garnering 20 Democratic votes.
