Its official subtitle is “A bill to promote economic growth, provide tailored regulatory relief, and enhance consumer protections, and for other purposes.”
The legislation would change key parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act. A similar bill was passed by the House, but it did not go forward in the Senate because it had only Republican support. As you see in the voting numbers, this new bill has bi-partisan support, which is remarkable given the rancorous politics in Congress.
Here are some of its recommendations:
- Raise the regulatory limit on when systematically important financial institutions (SIFI) are subject to additional Federal Reserve supervision: from $50 billion to $250 billion in assets.
- Smaller banks (less than $10 billion in assets) would be able to waive ability-to-repay for select residential mortgages; they are also exempt from the Volcker Rule, which prohibits them from engaging in proprietary trading and entering certain relationships with hedge and private equity funds.
- Appraisals, mortgage data, employment of loan originators, manufactured homes, and transaction waiting periods are also modified.
- Reduces inspection requirements and environmental-review requirements for certain smaller, rural public-housing agencies.
- Enhanced prudential regulation for financial institutions is modified including stress testing, leverage requirements, and the use of municipal bonds to meet liquidity requirements.
- Credit-reporting agencies would be required to report credit-freeze alerts and include consumer-credit provisions related to senior citizens, minors, and veterans.
If it passes the Senate, it will be sent to the House for consideration. Many banking industry groups support it including the Mortgage Bankers Association.