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US Senate votes 67-32 to begin debate on bank bill

US Senate votes 67-32 to begin debate on bank bill

Seventeen members of the Democratic caucus joined almost all Republican senators on Tuesday in voting to advance the Economic Growth, Regulatory Relief, and Consumer Protection Act, a bill that was co-sponsored by Senate Banking Committee Chair Mike Crapo (R-Idaho) and committee member Sen. Mike Crapo (R-ID), would amend the Truth-in-Lending Act (TILA) to allow institutions with less than $10 billion in assets to waive ability-to-repay requirements for certain residential-mortgage loans.

Backers of the plan argue that smaller banks shouldn't have to face the same set of strict rules as behemoth Wall Street banks that could endanger the entire financial system if they go under.

While Republicans are all in favor of the bill, not all Democrats agree with Warren.

The Senate will take up a bipartisan bill this week that could ease some of the banking rules in the infamous Dodd-Frank reform bill that passed in 2010. "CBO estimates that the probability is small under current law and would be slightly greater under the legislation". Before Dodd-Frank, 76 percent of all bank accounts were free, charging no usage fee to the consumer.

"We understand there's going to be divisions in the Democratic caucus", Virginia's Warner said. "The Senate just voted to increase the chances your money will be used to bail out big banks again", Massachusetts Democratic Sen.

With the Senate expected to consider the legislation this week, Warren said she work to ensure it does not become law by giving a series of floor speeches that highlight how it will impact consumers, benefit big banks and fit into the history of bank deregulation.

Democrats are divided on the bill. Elizabeth Warren, D-Mass. They said excessive regulation has driven small banks in rural America out of business, making it harder for businesses in their states to get credit.

Sherrod Brown, the top Democrat on the Senate Banking Committee.

The Systemic Risk Council (SRC) created and sponsored by the CFA Institute recently submitted a very cautionary response to the Senate Banking Committee on Senate Bill 2155.

Despite the act's intentions, large banking institutions have grown dramatically since the passage of Dodd-Frank, and small community banks have incurred serious losses trying to keep up.

The possibility came up because the centrepiece of the bill is the loosening of some of the tougher Dodd-Frank requirements for banks with between $50 billion and $250 billion in assets, a provision meant to provide relief to regional banks like Suntrust or Fifth Third Bank that are large but quite different from Wall Street megabanks. But this is senseless spin-only about 25 banks fall into this category, and they are among the 38 biggest banks in the country.

The Fed's annual evaluation of the financial system would no longer apply to banks with less than $100 billion in assets. But its U.S. arm has only around $74 billion in assets. The senator sent an email to her constituents Friday lambasting her Republican and Democratic colleagues for backing the bill, claiming they are selling out to industry lobbyists and bankers.

Even though the banks said that they support the bill, they noted they would prefer to scrap the asset threshold altogether and instead allow the Federal Reserve Board to designate banks as systemically important by using its own measurement of riskiness.

Warren said: "I don't understand how anyone regardless of political party could support a bill like that".

That provision, she said, "may be the single most unsafe".

Warren, whose brainchild is the Consumer Financial Protections Bureau (CFPB), is one of the most ardent supporters of the 2010 law, believing it is a crucial safeguard against malpractice on the part of large banks.

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