Banking and Finance Law Daily Amendments to Senate bill to modify Dodd-Frank provoke debate
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Friday, March 9, 2018

Amendments to Senate bill to modify Dodd-Frank provoke debate

By Colleen M. Svelnis, J.D.

The Senate Committee on Banking, Housing and Urban Affairs is considering an amendment in the nature of a substitute to S. 2155, the "Economic Growth, Regulatory Relief, and Consumer Protection Act," a bill that would modify provisions of the Dodd-Frank Act and related laws governing financial services.

The legislation seeks to change the regulatory framework for large banks with assets over $50 billion and for small depository institutions with assets under $10 billion—generally, community banks. Truth in Lending Act amendments would allow community banks to waive "ability to repay" requirements for residential mortgage loans under certain circumstances, and Bank Holding Act amendments would exempt community banks from certain "Volcker Rule" requirements. In addition, the measure would make changes to regulations governing consumer mortgages, consumers’ access to credit, and credit reporting (see Banking and Finance Law Daily, March 8, 2018).

Banking Committee ranking member Sen. Sherrod Brown (D-Ohio) called the substitute amendment "well-intentioned" but stated that the changes made in the amendment "do nothing" to fix the problems he sees in the bill, and might "actually make the bill worse." Brown stated that the amendment includes provisions designed to help credit reporting agency Equifax despite its massive data breach that affected over 140 million Americans. According to Brown, the amendment requires consumers and servicemembers to "give up their right to take Equifax to court the next time the company’s recklessness exposed sensitive financial data."

The Independent Community Bankers of America expressed its support for the substitute amendment, "which keeps the bill focused on community bank relief, protection for veterans’ credit, safeguards against identity fraud, and other provisions." ICBA pointed out that the amendment ensures that the relief provided in S. 2155 from new Home Mortgage Disclosure Act reporting is not available to banks with low ratings under the Community Reinvestment Act.

U.S. Chamber of Commerce released a statement noting their opposition to any amendment to S. 2155 which would require the Comptroller General and the Government Accountability Office to audit the Board of Governors of the Federal Reserve System, calling it "unnecessary" because the Federal Reserve issues audited annual financial statements.

In a letter, the consumer advocacy group Americans for Financial Reform, urged Senators to vote against the amendment, calling it "radical legislation" that would weaken bank supervision, especially at the largest banks. AFR warned that the amendment would have the effect of "substantially" increasing the risk of systemic problems, "and of unfair and predatory treatment of consumers."

Companies: Americans for Financial Reform; Independent Community Bankers of America; U.S. Chamber of Commerce; Equifax

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