Biggest Change to Bank Rules Since Dodd-Frank Becomes Law

Last week, the House passed a bill to weaken the Dodd-Frank banking regulations adopted in 2010, largely in response to the 2008 financial crisis. Two days later, President Trump signed the rollback into law.

After the legislation passed the Senate by a bipartisan vote of 67-31, the House was widely expected to pass the measure and send it to the President’s desk.

Mick Mulvaney, Acting Director of the Consumer Financial Protection Bureau, praised the legislation’s becoming law.

“I applaud my former colleagues in Congress for coming together to pass the most significant financial reform legislation in recent history,” Mulvaney said in a statement. “This new law will improve consumers’ access to credit, reduce regulatory burdens on credit unions and community banks, and fuel economic growth and job creation across the nation.”

One of the biggest impacts that the Economic Growth, Regulatory Relief and Consumer Protection Act has is on smaller banks, which are now freed from the burden of being labeled “too big to fail.” It does this by raising the asset threshold for lenders to face stricter Federal Reserve oversight from $50 billion to $250 billion. Banks like American Express Co. and SunTrust Banks Inc. are now able to escape the higher compliance costs that come with the higher-tier association.

Bigger regional banks like Capital One Financial Corp. and PNC Financial Services Group, however, are still lumped in with the Systemically Important Financial Insitutions (SIFI) – the “too big to fail” designation.