Several Democratic lawmakers facing tough re-election races this year have broken ranks with Minority Leader Chuck Schumer, D-N.Y. and Sen.
Dem Sen. Liz Warren of MA is going to fight it tooth and nail. Jon Tester (D-Mont.). The legislation garnered support from a mix of centrist and red-state Democrats, who argued it would help small community banks and make it easier for Americans to buy a home by increasing access to capital.
"If we lose the final vote ... we'll be paving the way for the next big crash", Warren said.
This is the meat-and-potatoes deregulation that the bill's advocates in both parties are pointing to as proof it eases undue burdens on noble community banks rather than handing out favors to the villains of the last crisis. "CBO estimates that the probability is small under current law and would be slightly greater under the legislation", the budget scorekeeper said in a cost estimate published this week. Now, just about 10 years after the financial crisis that destroyed millions of jobs and devastated the country, Republicans want to weaken Dodd-Frank and unleash some of the banks' worst tendencies. And if such changes coincide with a move to do less stress testing at fewer firms, as this bill mandates, the risk of a new collapse is even larger.
"We know what happens next". Critics said that removing this oversight could lead to problems that led to the 2008 recession, mainly predatory lending and investing. Far from being a giveaway to big banks, the bill targets banks between $50 and $250 billion in assets, banks which are the main drivers of small business lending and consumer banking products. The senator explained that it is likely unfair for community banks to endure heavy regulations imposed on large banks when they "don't pose" the same kind of threat to the economy if they endure a crisis. Four years after the passage of Dodd-Frank, the number of small banks, which provide almost half of the banking industry's small business loans despite holding less than 20 percent of its assets, had declined by 14.1 percent.
The legislation would increase the threshold at which banks are considered too big to fail. But its USA arm has only around $74 billion in assets.More news: FDA gives nod to 23andMe for no-prescription breast cancer gene testing
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The bill aims to ease restrictions on smaller banks while leaving many regulations on larger banks in place, but May isn't sure that will stop the consolidation of banks.
One of the major changes proposed in the bill is a provision that would shrink the number of big banks that, under Dodd-Frank, are subject to additional scrutiny created to assess their ability to withstand financial shocks-in essence, extra checks to determine how likely the banks are to fail or to require a government rescue with public dollars. Since today is "Dodd-Frank was good for consumers, and this bill will hurt consumers" day, lets think about the track record a bit.
As it stands now, the "big issue" is whether the Republicans will allow amendments to the bill, Warren said, adding that she's got a "dozen" amendments ready to go.
The Senate bill emerged from lengthy negotiations between Sen.
During that markup, Donnelly was one of four Democrats who banded together with the panel's Republicans to block changes sought by other Democrats. For the others, compliance costs should drop. Yes, there are some Democrats willing to give the GOP the votes it needs to push it forward. But members of the progressive wing of the Democratic Party have been mounting resistance to the entire bill. The bill's supporters anxious adopting the amendments - many of them consumer protections - would cause the underlying bipartisan agreement to break apart.
Detractors say it would loosen regulations and encourage large financial firms to take excessive risks.