Rewritten Financial Reform Law Would Ease U.S. Small Bank Lending

The 2010 Dodd-Frank financial reform law giving the U.S. government regulation over the financial industry is headed toward a rewrite that would ease tight restrictions on small banks and community lenders. Following the U.S. Senate’s vote to approve the revised bill on March 14, the legislation is making its way to the U.S. House of Representatives.

According to a recent Reuters report, small banks and community lenders would see benefits from the rewritten bill, unlike large U.S. banks, including raising their risk threshold from $50 billion to $250 billion that would normally lead to “stricter oversight.” The report also said that banks with less than $10 billion in assets won’t have to worry about the ban on proprietary trading.

The original bill, enacted after the 2007-2009 global financial crisis, was criticized by Republicans for its effect on banks’ lending abilities, Reuters said, but applauded by Democrats for its “critical protections for consumers and taxpayers.” If passed in the House, the bill would go back for another vote in the Senate

“There’s no guarantee that a modified bill would be able to pass the Senate. That’s a real danger,” Paul Merski, executive vice president with the Independent Community Bankers of America, said in the Reuters report. Merski supports the bill.

-Andrew Michaels, editorial associate

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