House Passes Dodd-Frank Act Deregulation Reform Bill

Desiree Patno

Desirée Patno is the CEO and President of Women in the Housing and Real Estate Ecosystem (NAWRB) and Desirée Patno Enterprises, Inc. (DPE). With almost three decades specializing in the Housing and Real Estate Ecosystem, she leads her executive team’s expertise of championing women’s economic growth and independence.

The Financial Services Committee announced today that the House of Representatives has passed the ‘Economic Growth Regulatory Relief and Consumer Protection Act,” by a 258-159 vote. The new bill is presented as a “pro-growth financial regulatory reform package,” which features a significant number of rollbacks of Dodd-Frank Act regulations since the financial crisis almost a decade ago.

The bill, also known as the “Crapo bill” for its author, Senate banking committee chair Mike Crapo, now heads to President Donald Trump to be signed into law. The bill lifts a number of regulations on community and regional banks, while keeping some of the regulations in the Dodd-Frank Act.

The bill has been officially endorsed by Comptroller of the Currency Joseph M. Otting. “Today is an important day with the House passage of Senate Bill 2155,” states the Comptroller of the Currency in a recent press release. “This bill restores an important balance to the business of banking by providing meaningful reductions of regulatory burden for community and regional institutions while safeguarding the financial system and protecting consumers.”

Proponents believe this will allow more freedom to banks and consumers more access to credit, while also helping long-term growth of the nation’s economy. Opponents of the bill are concerned that repealing such regulations will undermine protections for consumers intended by Dodd-Frank and leave the economy vulnerable to another financial crisis.

Among other changes, the new bill

  • Increases threshold for banks to qualify as a Systemically Important Financial Institution (SIFI), which are subject to greater regulations, from $50 billion to $100 billion in assets;
  • Exempts banks with less than $10 billion in assets from the “Volcker Rule,” which intends to limit risky investment practices by prohibiting depository institutions from proprietary trading and investment in certain hedge funds and private-equity firms;
  • Enforces of credit-reporting agencies to allow consumers free credit freezes, and protection of agencies from certain class-action lawsuits; and
  • Allows firms to offer credit checks for mortgage applications.

There is disagreement among experts about whether this law is a complete dismantling of the Obama-era Dodd-Frank Act, or simply a nuanced adaptation of the previous regulatory acts. The consequences of the bill are yet to be seen, and the changes will occur gradually. Regardless, consumers should continue to be cognizant of how their hard-earned resources are being managed and protected by financial institutions.

Read the full press release here.

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