After the Great Recession a decade ago, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Even then, some lawmakers thought the bill went too far, unintentionally punishing small lenders like our neighborhood credit unions.
As time has passed, it’s become clear that the regulations imposed by Dodd-Frank were flawed. The law sees no distinction between the Wall Street banks responsible for the recession and the Main Street credit unions that were not.
In recent weeks, Congress has debated a solution: the Economic Growth, Regulatory Relief, and Consumer Protection Act. This bill pares back some of those regulations, and has support from both sides of the aisle.
Here’s what the legislation does (according to GovTrack):
- Exempts financial institutions with less than $10 billion in assets from some rules entirely, most notably the so-called Volcker Rule, which bans banks from making some forms of speculative trades.
- Requires the Federal Reserve to take institution size into account when crafting regulations, rather than “one size fits all” regulations as critics contend the Fed has been doing for the past decade.
Among the supporters of the bill are South Carolina Senator Tim Scott and Senator Lindsey Graham. The White House also released a statement in support, saying, “The bill is consistent with the Administration’s core principles for regulating the United States financial system. Specifically, the bill would advance the principles of: (1) fostering economic growth; (2) making regulation efficient, effective, and appropriately tailored; and (3) empowering Americans to make independent financial decisions and informed choices in the marketplace.”
We thank our senators for their support of South Carolina credit unions, and thank our state senators for showing their support for a stronger state charter.