The House will vote next week on bipartisan legislation to ease some of the Dodd-Frank rules on banks and financial firms, the first such major revision to new financial rules imposed in the wake of the financial crisis a decade ago.
House passage would be a major victory for community and regional banks, which have been pushing hard for representatives to quickly send the bill to President Trump’s desk after the Senate cleared it in March.
It would also provide a win for Republican legislators who have been navigating legislative gridlock, as well as for vulnerable Senate Democrats who will be able to cite it as as example of bipartisan achievement.
An aide to House Majority Leader Kevin McCarthy confirmed that the bill would get a House vote next week, and noted that the California Republican expects both chambers to proceed with additional measures in future weeks.
The bill, S. 2155, is likely to pass easily with a bipartisan majority, as it mostly consists of smaller bills that previously passed the House with strong Republican and Democratic support.
Passage had been held up, though, because House Financial Services chairman Jeb Hensarling had sought to negotiate for more bipartisan additions to the Senate-passed version. Bank lobbyists resisted that idea out of fear that requiring Senate Democrats to vote on the bill a second time could doom it.
The standoff was resolved via an agreement that the Senate would consider a second bill including some of the bipartisan measures left out in this go-round.
A representative for Hensarling said he had asked for a vote before Memorial Day in light of the need for a second vote on financial regulatory legislation.
The legislation headed to the House floor next week is much less sweeping than the total rewrite of Dodd-Frank that conservatives sought at the start of the Trump administration. But it would significantly lessen burdens for some smaller banks and make dozens of significant changes to the regulatory regime.
The biggest provision would be an increase in the size threshold at which banks are subject to stricter regulations. Under current law, the cut-off is set at $50 billion in assets. The bill would raise that to $250 billion, providing relief for regional banks like SunTrust and Fifth Third.
For smaller, community banks, the bill also includes relief from some mortgage rules and the Volcker Rule, the regulation meant to prevent banks from speculating for profit with deposits insured by the federal government.
Those changes won support from 17 Senate Democrats, including several up for re-election in states won by Trump. Yet Elizabeth Warren, the liberal Massachusetts senator, fought hard against the bill, saying that it would allow big banks to take on more risk.
It is not yet known what additional measures might be included in the second package that the Senate is supposed to consider.
Senate Banking Committee chairman Mike Crapo said Tuesday that the two chambers had yet to work out how to proceed with the legislation. “We’re all going to be talking — Republicans, Democrats, House, Senate,” he said.
Senate Democrats, meanwhile, have not yet begun to engage with Republicans on the second bill.
“We’re focused on getting the first one done first, and then happy to take a look,” said Sen. Joe Donnelly of Indiana, a member of the Banking Committee and one of the Democrats to vote for the first bill.
