Federal Reserve puts forward proposals to modify Dodd-Frank bank regulations

WASHINGTON — The Federal Reserve put forward two proposals Monday to modify regulations put in place after the 2008 financial crisis that the banking industry complained were too restrictive.

The proposed regulatory changes were approved 4-1 by a vote. Fed board member Lael Brainard opposing the changes. She said they “would weaken important safeguards” put in place after the crisis.

The measures will not go into effect until after a public comment period ends this summer. One proposal deals with liquidity, the amount of funds a bank must maintain that would be readily available in times of crisis.

The other would loosen the frequency that some foreign and domestic banks would be required to submit “living wills,” documents that show how a failed bank would wind down operations.

The proposed changes are being put forward to update regulations following congressional passage of a measure to loosen some of the requirements imposed by the 2010 Dodd-Frank Act, which had been passed in response to the financial crisis.

Randal Quarles, Trump’s Fed vice chairman for bank supervision, said that the proposals put out on Monday streamlined requirements for foreign and domestic banks.

“The proposals seek to increase the efficiency of the firms without compromising the strong resiliency of the financial sector,” Quarles said.

Brainard argued that the proposals would increase unnecessary risks for the financial system.

“I see no change in the financial environment that would require us to weaken protections that are vital to a safe and sound financial system,” she said.