Tensions are running high as the Dodd-Frank rollback bill, S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, designed to deregulate the banking industry is up for a Senate vote this week.
Sen. Elizabeth Warren, D-Mass., said during a Tuesday morning press briefing that the bill “increases the chances of another bailout” and vowed to “fight back” this week as the legislation is debated on the Senate floor.
Other critics like Phil Angelides, former chairman of the Financial Crisis Inquiry Commission, argue the bill “would weaken the financial system safeguards and taxpayer and consumer protections put in place in the wake of the financial crisis.”
As it stands now, the “big issue” is whether the Republicans will allow amendments to the bill, Warren said, adding that she’s got a “dozen” amendments ready to go. “I want an open amendment process,” she said. “I’m going to keep pushing for it.”
The bill would change the regulatory framework for small depository institutions with assets under $10 billion (community banks) and for large banks with assets over $50 billion, as well as revise consumer mortgage and credit-reporting regulations and the authorities of the agencies regulating the financial industry.
Under the bill, the Federal Reserve would be required to ease its capital and liquidity requirements for regional banks with $50 billion to $250 billion in assets.
Warren complained that one provision of the bill “changes one word, the Fed ‘shall’ tailor the rules, instead of ‘may.’” With “that one-word change,” she said, “banks can sue the Fed if they don’t weaken the rules the way they want.”
That provision, she said, “may be the single most dangerous.”
Meanwhile, the Congressional Budget Office released on Monday a score of the bill, stating that enacting it would increase federal deficits by $671 million over the 2018-2027 period; that increase in the deficit represents an increase in direct spending of $233 million and a decrease in revenues of $439 million.
Some of that cost and reduction in revenues, CBO said, “would be recovered through collections from financial institutions in years after 2027.” CBO also estimates that, assuming appropriation of the necessary amounts, implementing the bill would cost $77 million over the 2018-2027 period.
Warren was questioned during her Tuesday press briefing why 11 of her Democratic colleagues supported the bill, which they say will help community banks.