The path is nearly clear for bipartisan legislation easing rules on banks to clear the Senate this week.
The upper chamber voted Monday to end debate on an amendment by the bill’s author, Senate Banking Committee Chairman Mike Crapo, R-Idaho, that would update and replace the version of the legislative package that advanced through his committee in December, including some small provisions that could help shore up Democratic support.
The vote was 66 to 30, with 17 Democrats joining with all Republicans in favor.
Majority Whip Sen. John Cornyn, R-Texas, suggested he hoped the bill would pass this week.
Still to come, though, is an agreement between Republicans and Democrats over possible votes on amendments. Those negotiations are tricky because any changes to the bill could upset Democratic support. So too could any alterations made in the House of Representatives.
The legislation has strong Senate support despite a concerted effort by Sen. Elizabeth Warren, D-Mass., to attack the bill — and its Democratic backers — as a favor to Wall Street that would invite another financial crisis.
The bill’s advocates advertise it as much-needed relief for community and regional banks.
It “starts from a simple premise: Small community lenders on Main Street are not the same as the multi-trillion-dollar banks on Wall Street,” said Senate Majority Leader Mitch McConnell, R-Ky.
Under the legislation, small banks would face less oversight from regulators and escape restrictions on mortgages and speculative trading. The bill also would raise the cutoff at which banks are subject to stricter oversight from the Federal Reserve, from $50 billion to $250 billion. That change would benefit regional banks such as Cleveland’s KeyBank and Birmingham’s Regions Bank.
Warren and outside groups have charged that raising that threshold would raise the risk of regional banks failing and requiring bailouts, and that the fine print of the legislation would undo rules for the biggest banks, such as JPMorgan Chase and Citigroup.
On Monday afternoon, Warren again criticized the bill on the Senate floor. She dismissed the changes made in Crapo’s legislation as “a bunch of fig leaves designed to allow supporters of the bill to pretend” that they have addressed criticism.
Yet the bill’s sponsors reject those charges, and the Democrats supporting it have bristled at the criticism.
Speaking on Boston-area public radio Monday, former Massachusetts Democratic Rep. Barney Frank, one of the designers and namesakes of the 2010 Dodd-Frank regulation law, said he didn’t believe the Crapo bill would usher in a new crisis and objected to criticisms of the Democrats who are set to vote for the measure. “I think it’s a mistake to suggest that people should be in any way less supportive of these senators,” he said.