Reform is Right: The Economic Growth, Regulatory Relief, and Consumer Protection Act

S.2155 is an important step that we support. We will advocate for additional regulatory tailoring provisions both via this legislation and through the regulatory process.

Reform is Right: The Economic Growth, Regulatory Relief, and Consumer Protection Act
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KEY POINTS

  • This bill is an important step that we support. We will advocate for additional regulatory tailoring provisions both via this legislation and through the regulatory process.

  • We continue to seek tailoring that matches regulation to the risks in the system while promoting economic growth, and we will work with lawmakers to achieve that objective.

  • This BIPARTISAN legislation is the product of years of work by Senators seeking common-sense solutions to help regular people access capital.

 

S.2155 is the product of years of work by Senators seeking common-sense solutions to help regular people access capital. → Click To Tweet

 

 

WHAT DOES S.2155 DO?

 

  • Increases access to online banking (MOBILE Act)

  • Provides greater protection for senior citizens against fraud

  • Enhances community lenders’ ability to increase mortgage credit access

  • Promotes investment in local and state building projects

  • Tailors regulatory requirements to allow a greater focus on lending

 

Modernizing regulations is economic common sense. Financial institutions are only successful when they can meet the financing needs of their customers. → Click To Tweet

 

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WHERE WE’D LIKE TO SEE IMPROVEMENTS?

 

  • Better tailoring of liquidity and net stable funding rules

  • More transparency regarding the formulation of annual stress test scenarios

  • Better standards and processes regarding the submission and consideration of living wills

  • Commonsense guidelines on capital standards for operational risk

  • Clarify the powers of OCC Banks under the National Bank Act (Confirm “valid when made” doctrine)

 

 

FACT CHECK: The Economic Growth, Regulatory Relief, and Consumer Protection Act #S2155 → Click To Tweet

 

MYTH:

This bill guts Dodd-Frank and helps the nation’s largest banks.

FACT:

This bipartisan bill preserves all of the key tenets of Dodd-Frank, including all of the provisions that were designed to expand Federal oversight of consumer protection; the bill simply makes technical corrections and targeted adjustments to improve the operations and impact of the law and its implementing regulations, to achieve the original statutory objectives.

MYTH:

This bill rolls back stress testing requirements for all big banks.

FACT:

The Federal Reserve retains the authority to subject all banks over $100 billion to rigorous stress testing requirements.

MYTH:

Banks are making record profits despite claiming the Dodd-Frank Act is restrictive and stifles lending.  Why should they be deregulated now?

FACT:

The legislative proposal does not deregulate or eliminate any of the critical safety and soundness measures instituted by Dodd-Frank.  Bank profitability alone is not an indication of a healthy, robust marketplace and those who are most negatively affected by regulatory overreach promulgated as a result of Dodd-Frank are not the banks, but the consumers.  The need for the moderate and sensible changes proposed in this bill is premised on economic fundamentals, recognizing that financial institutions are only successful when they meet the financing needs of their customers. Modernizing regulations will help optimize economic growth and help extend more loans to start a business, finance a house, and send their kids to college.

MYTH:

This bill weakens consumer protections.

FACT:

Nothing in this legislation will change or dilute consumer protections or the ability of regulators to inspect financial institutions for compliance with consumer rules or bring enforcement actions. Furthermore, the bill provides important new protections that will help banks protect their customers against fraud.

MYTH:

This bill will help banks who have recent BSA violations–now is the time to break them up, not deregulate.

FACT:

The reform bill before the Senate is about increasing the lending capacity of the financial system. BSA requirements are an important topic, but are a complete non sequitur in terms of this legislation. Compliance with the BSA rules is a complex undertaking and FSR has several recommendations on allowing more collaboration between the government and industry. We disagree with those, however, that try to use BSA issues as a distraction from correcting regulatory flaws that are limiting the growth potential of the economy. 

MYTH:

This bill deregulates massive global banks turning our financial system back into a casino, leaving consumers on the hook.

FACT: 

There are no provisions whatsoever in this bill that change the regulatory oversight of the largest global institution nor intermediate holding companies for foreign banks with a large presence in the United States. Separately, foreign banks such as Credit Suisse, UBS, and Deutsche Bank, which conduct large trading operations will continue to be regulated under the Federal Reserve’s specialized LISCC framework.   

MYTH:

This bill exposes many home buyers to financial exploitation by weakening rules against mortgage lenders.

FACT:

Under this bipartisan bill, all fair lending and consumer protection laws are maintained, including the Dodd-Frank prohibitions on risky mortgage products.  And borrowers can still sue any lender that has committed fraud or illegal acts.  The bill enables home buyers by making smaller lenders more competitive in extending mortgage credit.

MYTH:

This bill weakens the Home Mortgage Disclosure Act (HMDA) effectiveness to gather data on mortgage lending.

FACT:  

The bill would streamline the reporting requirements for small banks that make fewer than 500 mortgage loans or 500 open-ended lines of mortgage credit Removing the regulatory burden on these smallest mortgage lenders will support the lending activities of the very mortgage companies that are reaching deepest into the traditionally underserved population.    Reducing certain reporting burdens does not relieve these small banks of any of their fair lending, CRA, or other such lending obligations.

 

 

READ OUR SUPPORT LETTER