The US House of Representatives on Tuesday passed bipartisan legislation that would ease bank rules introduced in the wake of the 2007-2009 financial crisis, Reuters reports.
Approved 258-159, the bill raised the threshold at which banks are considered systemically risky and subject to stricter oversight.
The threshold was increased to US$250 billion from US$50 billion.
Meanwhile, it also eases trading, lending and capital rules for banks with less than US$10 billion in assets, rolling back some of the 2010 Dodd-Frank rules that restricted operations by smaller banks and community lenders, the report said.
The bill, which was approved by the Senate in March, marks the first significant rewrite of US financial rules introduced following the crisis, giving President Donald Trump a major legislative victory.
Republican critics say Dodd-Frank went too far and curbs banks’ ability to lend, while many Democrats say it provides critical protections for consumers and taxpayers.
It does not, however, weaken the top US consumer watchdog created by Dodd-Frank that has been consistently attacked by Republicans who say it oversteps its mandate.
But the bill does offer a handful of niche provisions that would help some larger banks, such as allowing custody banks like BNY Mellon and State Street Corp to exempt the customer deposits they place with central banks from a stringent capital calculation requirement.
It also offers more favorable treatment for municipal bonds, according to the report.
The bill also does not alter the so-called “Volcker Rule” banning Wall Street banks from making risky bets with their own money, or limit the ability of regulators to apply stricter rules to large institutions they deem critical to the financial system.
– Contact us at [email protected]