US Se­nate panel reaches deal to re­duce small bank rules

Manila Times - - BUSINESS -

WASH­ING­TON: US sen­a­tors agreed Mon­day on leg­is­la­tion to re­duce the reg­u­la­tory bur­den on small banks, re­form­ing rules es­tab­lished cri­sis, while also im­prov­ing pro­tec­tions for con­sumers.

In a show of bi­par­ti­san­ship rarely seen in the first year of Pres­i­dent Don­ald Trump’s ad­min­is­tra­tion, Repub­li­cans and Democrats on the Se­nate Bank­ing Com­mit­tee clinched a deal to roll back rules that sub­ject small com­mu­nity banks to the same stan­dards as huge fi­nan­cial in­sti­tu­tions.

“The bi­par­ti­san pro­pos­als on which we have agreed will sig­nif­i­cantly im­prove our fi­nan­cial reg­u­la­tory frame­work and foster eco­nomic growth by right- siz­ing reg­u­la­tion, par­tic­u­larly for smaller fi­nan­cial in­sti­tu­tions and com­mu­nity banks,” Com­mit­tee Chair­man Mike Crapo, a Repub­li­can from Idaho, said in a state­ment.

The deal won the sup­port of nine Democrats on the com­mit- tee. The House passed its ver­sion of the reg­u­la­tory re­form in June, but it had no Demo­cratic sup­port.

Sen­a­tor Mark Warner said the re­form pro­vides “com­mon­sense re­lief to the com­mu­nity banks that are life­lines for smaller and ru­ral com­mu­ni­ties” while keep­ing tougher rules for large banks.

“The goal is sim­ple: to help Main Street by rolling back un­nec­es­sary and bur­den­some reg­u­la­tions on credit unions and small com­mu­nity banks while en­sur­ing that large Wall Street banks re­main sub­ject to the rules I helped put in place af­ter the fi­nan­cial cri­sis to pre­vent an­other melt­down,” the Vir­ginia Demo­crat added.

The Se­nate bill raises the size thresh­old for banks re­quired to fol­low the more oner­ous and costly reg­u­la­tory steps to $ 100 bil­lion from $50 bil­lion.

Those banks with as­sets of $ 100-$ 250 bil­lion will be ex­empt from the reg­u­la­tions for 18 months.

The Amer­i­can Bankers As­so­ci­a­tion said it sup­ports the pro­posed step” in ad­just­ing reg­u­la­tions.

How­ever, ABA pres­i­dent Rob Ni­chols said the as­so­ci­a­tion op­poses “ar­bi­trary as­set thresh­old” as the ba­sis for reg­u­la­tion, and in­stead urges au­thor­i­ties to use “a bank’s risk pro­file and busi­ness model.”

But the changes “will at least spare more banks from reg­u­la­tory re­quire­ments that made lit­tle sense for in­sti­tu­tions of their size,” Ni­chols added.

The leg­is­la­tion also in­cludes con­sumer pro­tec­tions, in­clud­ing fraud alerts for vic­tims of iden­tity theft for one year with­out charge from credit bu­reaus, and pro­tec­tions for veter­ans fac­ing med­i­cal debt or se­niors be­ing ex­ploited.

The mea­sure also would re­quire a re­port by the Se­cu­ri­ties and Ex­change Com­mis­sion, the US stock mar­ket reg­u­la­tor, on the trad­ing, the high- speed trad­ing con­ducted by com­put­ers.

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