From today’s LA Times:
Before the 2008 financial crisis, BAC Community Bank in Stockton made about 100 mortgage loans a year. Now, after new regulations mandated in the Dodd-Frank Wall Street Reform and Consumer Protection Act, the figure is down to about two dozen.
“We were never a big mortgage lender, but we did quite a bit more before Dodd-Frank,” said Bill Trezza, the bank’s chief executive. “It basically pushed us out of that to the point where we will do mortgages only for our customers if they request it.”
He and other small bankers hope that’s about to change. And a political shift is making that possible.
Nearly a decade after the financial crisis, some Democrats are ready to go along with a Republican push to significantly loosen the landmark law enacted to try to prevent the next one.
Senate legislation focused on easing new mortgage and other rules for small and mid-sized and regional banks has been co-sponsored by a dozen Democrats, several of them moderates up for re-election this year in states won by President Trump in the 2016 campaign.
The bipartisan support has the bill on track to be approved as soon as this week in what would be the first major overhaul of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
The House, which has approved more extensive financial deregulation, is likely to go along with the Senate’s more modest changes. Trump, who has called Dodd-Frank “a very negative force” in the economy and vowed during the campaign to dismantle it, would be expected to sign any bill that reduces its authority.
“The tone has shifted in D.C. from where regulation was necessary to protect the economy to the concern where regulation has gone too far and might be a drag on the economy,” said Ed Mills, a Washington policy analyst for financial services firm Raymond James. “Where that shift has occurred, it gave an opening to the smaller and medium-size banks to pursue these changes.”
But while there’s broad support for easing unintentional burdens in the law for small banks, many liberal Democrats are fighting the bill from Senate Banking Committee Chairman Mike Crapo (R-Idaho). They say it goes too far by also providing significant benefits for some larger financial institutions.
The legislation would exempt about 30 banks and other firms from the stricter oversight put in place by Dodd-Frank after the 2008 financial crisis. That 2010 law was an attempt to prevent a repeat of the bailouts and damage to the economy.
Read the complete article here.