Congress rides to the rescue of thriving bankers


President Donald Trump and other supporters of the major banking bill that cleared the Senate on Wednesday say they want to rescue the nation’s lenders from a crush of regulations.

But far from being crushed, the industry looks more like it’s booming.

Banks have hauled in record profits for the last three years and will be among the biggest winners under the new tax-reform law. Their loans are growing by 4 to 5 percent a year, well within historical norms. And even community banks, which the bill’s backers say they’re most concerned about, are making money.

Despite these signs of flourishing health, the deregulation bill passed the Senate in a 67-31 vote that included 16 Democrats and an independent, Angus King of Maine. The House will now take up the legislation. But critics of the bill say the facts undermine the case for rolling back key parts of the Dodd-Frank Act, the landmark law aimed at preventing a repeat of the 2008 financial crisis.

“I don’t see the real-world problem [the bill] is trying to solve, except the problem of bankers’ not making enough money,” said Marcus Stanley, policy director at Americans for Financial Reform, who is among progressives warning that the bill poses potential risks to the financial system.

Sen. Elizabeth Warren (D-Mass.) says the parts of the legislation that boost consumer protection and community banks could have easily passed on their own, without adding benefits for larger lenders.

So why the bipartisan push to roll back regulations?

Those who have embraced the bill — including at least a dozen Senate Democrats, many from states that voted for Trump — say it’s less about boosting bank profits and more about allowing smaller lenders to get back to their mission and encouraging new banks to open.

They say the legislation would free small banks and credit unions from burdensome regulatory costs and paperwork that take them away from serving their customers, especially those in under banked rural states.

For small banks, the bill would simplify rules around how they fund their operations, reduce barriers to making mortgage loans to customers with lower credit scores, and eliminate requirements for them to prove they don’t engage in speculative trading.

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