Small banks near big win on Dodd-Frank rollback - Entrepreneur Generations

A bipartisan bill to make changes to the Dodd-Frank regulatory reform law could bring relief to small community banks. The law, passed under President Obama in 2010, tightened rules on lending institutions in an effort to prevent another recession like the one in 2007-2008.

But supporters of the fix-it bill "argue that smaller financial institutions shouldn't have to face the same set of strict rules as behemoth Wall Street banks that could endanger the whole financial system if they go under. Top bank regulators all agree fixes should be made for community banks," Donna Borak reports for CNNMoney.


"Main Street businesses and lenders tell me that they need some regulatory relief if we want jobs in rural America," Democratic Senator Jon Tester of Montana said during a hearing to vet the bill in November. "These folks are not wearing slick suits in downtown New York or Boston. They are farmers, they are small business owners, they are first-time homebuyers."

The fix-it bill would raise the definition of a "too big to fail" bank from one that has $50 billion in assets to 250 billion, meaning more than two dozen midsize U.S. banks would be exempt from Dodd-Frank regulations. These smaller banks would no longer have to hold as much capital to cover balance sheet losses, wouldn't have to have plans in place to be safely dismantled if they fail, and would only have to take the Federal Reserve's bank health test once in a while instead of yearly. American operations of big foreign like Deutsche Bank would be exempt as well, Borak reports.

The bill was created by Republican Sen. Mike Crapo of Idaho, the chairman of the banking committee, and is backed by 12 Democrats and 12 Republicans. It's a narrowly-focused, moderate compromise the Crapo hammered out after years of bipartisan negotiations. The bill could be heard on the Senate floor as early as next week.

from The Rural Blog http://ift.tt/2EG1dd1 Small banks near big win on Dodd-Frank rollback - Entrepreneur Generations

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