Congress approves Dodd-Frank rollback

Legislation eases strict rules for many banks

WASHINGTON — A decade after the global financial crisis tipped the United States into a recession, Congress agreed Tuesday to free thousands of small and medium-sized banks from strict rules enacted as part of the 2010 Dodd-Frank law to prevent another meltdown.

In a rare demonstration of bipartisanship, the House voted 258-159 to approve a regulatory rollback that passed the Senate earlier this year, handing a significant victory to President Donald Trump, who has promised to “do a big number on Dodd-Frank.”

The bill stops far short of unwinding the toughened regulatory regime put in place to prevent the nation’s biggest banks from engaging in risky behavior but represents a substantial watering down of Obama-era rules governing a large swath of the banking system. The legislation will leave fewer than 10 big banks in the United States subject to stricter federal oversight, freeing thousands of banks with less than $250 billion in assets from a post-crisis crackdown that they have long complained is too onerous.

“The House just voted to free our economy from overregulation,” Paul Ryan, the House speaker, R-Wis., said in a tweet. “Main Street banks are engines of growth.”

Once the bill is signed by Trump, small and medium-sized banks will no longer be required to undergo “stress tests” aimed at measuring their ability to withstand a severe economic downturn.

The legislation also offers a reprieve to big — but not behemoth — banks, allowing large institutions like American Express to no longer be deemed “systemically important” and subject to stricter oversight.