From The Intercept:
HOW TWO HOUSE DEMOCRATS DEFENDED HELPING THE GOP WEAKEN DODD-FRANK FINANCIAL REGULATIONS (2018)
Ten years after the meltdown, Congress moves to loosen rules again. What could go wrong?
LEGISLATORS FROM BOTH parties came together this week to put the finishing touches on a sweeping measure to weaken bank regulations put in place to respond to the 2008 financial crisis.
In a shock to some observers, 33 House Democrats and 17 Senate Democrats ultimately joined with nearly every Republican to send the bill to President Donald Trump’s desk. Only one GOP legislator, Rep. Walter Jones, R-N.C., voted against it. Sen. Heidi Heitkamp, D-N.D., a co-author of the bill, stood next to Trump at the signing ceremony on Thursday.
The repeal bill was a major priority for industry. As The Intercept has reported, the bill loosens an array of regulations, including reporting requirements used to counter racial discrimination in lending practices. The bill also crucially shrank the amount of capital reserve banks must maintain and raised the threshold at which banks are required to comply with heightened risk-management regulations — all of it with the consequence of introducing more risk into the system.
Though touted as a bill narrowly tailored to benefit small and community banks, it also includes a provision that could allow banks, such as Citigroup and JP Morgan, to add more debt-fueled risk to their balance sheet, a change advocated by Citigroup’s lobbyists.
Rep. John Delaney, D-Md., one of the Democrats to vote for the repeal bill, said the measure was “entirely about community banks.”
Asked about large regional banks, such as SunTrust Bank, that stand to directly benefit from the bill, Delaney shrugged off the issue. “Yeah,” he said, “but they’re much more like community banks.”
The suggestion that SunTrust is akin to a community bank might strike some as odd. SunTrust currently holds $201.6 billion in assets making it roughly the same size as Countrywide, the failed subprime lender that originated 1 out of every 5 mortgages in the country at its peak, helping to trigger the global financial crisis.
The banking lobby, Delaney continued, had no influence over his vote. “I didn’t have anyone come and see me,” he said. The Maryland representative said the bill contained consumer protections targeted for veterans, and that Barney Frank, one of the original drafters of the Dodd-Frank financial reform bill, had supported the repeal bill