WASHINGTON -- A Senate committee Tuesday moved toward approval of bipartisan legislation to ease regulations on smaller banks.
Supporters of the bill by Senate Banking Committee Chairman Michael Crapo, D-Idaho, including nine Democrats and one independent, called it a sensible step to reduce burdens, mostly on community banks and credit unions, to make it easier for consumers to get mortgages and obtain credit.
Critics complained that the bill goes too far in exempting about 30 large financial institutions from stricter oversight put in place after the 2008 financial crisis.
The bill's most significant provision would reduce the number of financial institutions that face heightened scrutiny required by the 2010 Dodd-Frank Act.
The legislation would raise the threshold for so-called systemically important financial institutions, which face annual stress tests and other enhanced regulations, to $250 billion in assets from the current $50 billion level.
That would provide significant relief for large firms such as State Street Corp., Charles Schwab Corp., SunTrust Banks Inc., American Express Co. and the U.S. operations of giant foreign banks, including Credit Suisse, Deutsche Bank and Barclays.
There would be no changes to the strict oversight of JPMorgan Chase & Co., Bank of America Corp. Wells Fargo & Co. and the 10 other largest banks in the U.S.
The bill also would add new protections after the Equifax Inc. data breach, allowing consumers to freeze and unfreeze their files with credit reporting companies and requiring free credit monitoring for active-duty members of the military.
The goal of reducing regulations for smaller banks has broad support and Crapo worked with moderate Democrats to get enough on board to overcome the Senate's 60-vote hurdle for most major legislation. Banking industry and business groups have indicated their support.
The Economic Growth, Regulatory Relief and Consumer Protection Act is much less ambitious than changes in the Dodd-Frank Act passed by the House on a party-line vote in June.