MENU

Reason.com

Free Minds & Free Markets

Congress Just Voted to Repeal a Few Bits of Dodd-Frank

The Consumer Financial Protection Bureau stays, but Obama-era regulations that suffocated small banks are toast.

View Pictures/Anthony Weller / VIEW Pictures/NewscomView Pictures/Anthony Weller / VIEW Pictures/NewscomCongress voted Tuesday to roll back some Obama-era financial regulations. It's a significant policy change for small banks that had been unduly burdened by those federal rules, and a symbolic victory for Republicans.

The House voted 258-159 on Tuesday evening, sending the Senate-crafted reform bill to President Donald Trump's desk. The bill chips away at several parts of the Dodd-Frank Act, passed in 2010 in the wake of the economic collapse to give the federal government greater oversight of financial institutions. The most significant changes are targeted towards small banks. Those with less than $250 billion in assets are exempted from Dodd-Frank's so-called "enhanced prudential standards"—strict regulations regarding liquidity, risk management, and capital meant to serve as a "stress test" for banks' balance sheets. It would also exempt banks with less than $10 billion in assets from the so-called Volcker Rule, which limits speculative investments.

Other major parts of the Dodd-Frank law remain unchanged, including the Consumer Financial Protection Bureau (CFPB) and the so-called Durbin Amendment, which imposed price controls on debit card fees and has been blamed for reducing the availability of free checking accounts.

"The bill's major accomplishment is some much-needed tailoring of regulation to a financial institution's size so that hometown banks and credit unions are no longer regulated like Wall Street behemoths," says John Berlau, a senior fellow at the Competitive Enterprise Institute. "To provide real financial relief for Americans, much more is required of Congress, the president and regulatory agencies."

The Independent Community Bankers of America, which represents small banks, celebrated the passage of the bill. Community banks have struggled to comply with the 27,000 new regulations included in the 2010 law's 800-plus pages.

Policy aside, the bill's passage is symbolically important for Republicans, who have railed against Dodd-Frank for years. The importance of striking a blow—even if a less than lethal one—to the signature financial regulatory measure of the Obama era was demonstrated last week when House Republicans conceded to Senate demands and agreed to pass a scaled back Dodd-Frank reform.

Previously, the House had passed a more sweeping series of reforms that that rolled back more Dodd-Frank rules and fundamentally altered the CFPB's structure to allow the president to dismiss the head of the CFPB at will and prohibit the bureau from regulating payday loans or arbitration agreements, two areas where there has been significant conflict between the CFPB and financial firms. The Senate had crafted the bipartisan plan (16 Senate Democrats supported the bill) that ultimately reached Trump's desk with Tuesday's House vote.

"You take what you can get," said Stephen Moore, an economist and informal adviser to the Trump administration, told Politico. "If I can get half a loaf, I take that over no loaf at all."

This post was updated to clarify that banks with less than $250 billion in assets are exempted from some Dodd-Frank regulations and to correct the name of the Independent Community Bankers of America.

Photo Credit: View Pictures/Anthony Weller / VIEW Pictures/Newscom

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Shirley Knott||

    When did ??? become a number?

  • Rich||

    When did Those with less than $250 billion in assets from Dodd-Frank's so-called "enhanced prudential standards"—strict regulations regarding liquidity, risk management, and capital meant to serve as a "stress test" for banks' balance sheets. become a sentence?

    Seriously, is the Federal Reserve subject to a "stress test"?

  • Rich||

  • Cynical Asshole||

    Congress voted Tuesday to roll back some Obama-era financial regulations.

    Screeching, rending of garments, and salty ham tears from progressives in 3... 2... 1...

  • Yellow Tony||

    I took a slow, sorrowful draft on my culturally elegant fag while looking outside my living room window.
    "The Maine countryside has never looked so beautiful since the days before us white scum raped the land and its peoples."
    My son wheeled himself into the room, saying these wise words in an attempt to check my privilege and thus comfort me. Tommy, or Tomster as I and my son's mother calls him, is inflicted with polio, a nasty case of athletes foot, and ultra-AIDS that an undocumented Canadian immigrant gave him after a night of maple syrup induced rape. I love him dearly, but after the recent passage of a certain piece of legislation that abrogated some regulations, I've become more bitter.
    "Yes, it truly is... Tomster have you considered what we talked about earlier?" My voice stern but soft resonated in our poorly furnished living room.
    "Father, while I understand the plight, I don't think I should get sex reassignment surgery. I-I like being a boy!" His stentorian cry emasculated my prior admonishment, and also, slightly aroused me.
    "Dang it, Tomster, you need to be a girl! It's the only way I can get back at your mother! Don't make me rape you again!" In the heat of this exchange, I mentioned the secret that I thought I'd keep to my grave or the day of the rope (for men.) Tomster's face grew in consternation, contorting like Hillary Clinton's magnificent vagina as it's about to be ravaged by one of her slave boys.

  • Yellow Tony||

    Part 2
    "Y-you were the undocumented Canadian?" He shouted like the faggot I knew he was.
    "Of course, son. The intent was to show you that you're meant to be a poundee and not a pounder, so to speak. Embrace your femininity, dammit!" After so many years since my ex-wife cheated, I felt like a man: confident, strong, and sexy. In this whirlwind nostalgic feelings, I removed my dress and gave Tomster the ol' maple syrup routine.
    "Don't look so scared, Tomster. Just think like a girl."

  • Yellow Tony||

    I hope my story illustrates why toxic masculinity is bad, and that repealing regulation results in boys getting raped by their fathers.
    Thank you.

  • Leo Kovalensky II||

    I... I can't... I don't even.... You realize that I'll never be the same after having read that.

  • Yellow Tony||

    Check it, feminists and neo-liberals: I showed these evil, bigoted, and dumb lolberatrians the evils of males and less regulation. This is how's done.

  • gormadoc||

    But how did the father get the super-AIDs?!

  • vek||

    LOL WUT???

    You should give up your day job bro, and just go full time as a writer. It's amazing.

  • Ken Shultz||

    There was a time when telling people that there was a regulatory cycle that lags the credit cycle was about as socially acceptable as questioning global warming, supporting the legality of AR-15s, or sticking up for hate speech.

    The fact is that government loves to pile regulation on banks when we're in that point in the credit cycle where a lot of loans go bad, and they get rid of that regulation when times are good--no way politicians in a democratic society will stand between voters who want to buy a house and the banks who want to lend to them.

    The idea that regulation is somehow the solution to stop the credit cycle is, hence, dumber than Lou Ferrigno--yes, even if Obama fervently believed it. There is one idea that's even dumber--it's the idea that regulation will somehow stop the the government from electively bailing out Wall Street or the banks next time. There is no substitute for angry voters scoffing at experts.

    Stupid, stupid, stupid people talk about the economy and don't understand the first thing about the economic cycle. I guess we're always fighting the last war. We elected Obama because we were sick of the Iraq War. What we got was an economic illiterate just as Wall Street was reeling from the mortgage crisis. So much suffering was caused by heaping regulation on the banking system just as people were struggling to get new loans.

    And idiot progressives still think that regulation will stop the next downturn in the economic cycle.

  • Yellow Tony||

    But you always, always, always have to do something even though contractions are typically followed by expansion. Think of the children, Ken! THINK OF THE FUCKING CHILDREN!!!!!!!!!

  • I am the 0.000000013%||

    You realize that because of your story above, when you say THINK OF THE FUCKING CHILDREN, we now know what you really mean.

  • Don't look at me.||

    Does one dare to think that perhaps the introduction and repeal of regulations causes larger than natural swings in the cycle?

  • Leo Kovalensky II||

    You give the progressives too much credit Ken. They literally think that some bankers woke up and greedily tanked the economy in some evil money making scheme. That's not an exaggeration.

  • Sevo||

    Keep chipping away. If the GOPers keep it up, they can make Obo's stay in the WH totally irrelevant rather than harmful.

  • Don't look at me.||

    Many harms were done that will leave scars.

  • Sevo||

    Still...

  • Amir Najam Sethit||

    Nice Information.

  • vek||

    Well this is only about 8 years too late! I have banked with small local banks since I first started having bank accounts. They were always way more awesome than the big guys with things... Then this stupid law forced by bank to be acquired by a bigger bank... Which STILL wasn't big enough to be workable, and got bought out by a bigger one still.

    They're still decent as a more or less regional business oriented bank, but not nearly the level of personal touch and awesomeness they had when it was literally a 3-4 branch local bank. Oh well. Maybe some new ones will pop back up with some good features again since government almighty has given them permission...

  • Weigel's Cock Ring||

    Another one of the many things I really love is how now everything is Trump this, and Trump that, but for the previous administration it's never an Obama regulation around this place, it's always an "Obama-era regulation", as if he wasn't really the president, but rather an innocent bystander for everything that happened for eight years.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online