15 November, 2017, 12:00 am
WASHINGTON – A bipartisan group of US senators said on Monday they had reached a tentative deal to cut the number of banks labelled systemically risky, in a major step forward for efforts to roll back regulations enacted following the 2008 financial crisis.
The bill would exempt banks with less than $US250 billion ($F519b) in assets —including BB&T, SunTrust Banks and American Express — from heightened regulatory scrutiny, in a move that could redraw the domestic US banking landscape by reducing costs and unleashing a wave of mergers and acquisitions activity.
The agreement also proposes exempting banks with less than $US10b ($F20b) in assets from the so-called Volcker Rule, which bans banks from speculating in markets with their own capital — despised by lenders for its heavy compliance costs.
Bankers, who have been lobbying hard for congressional regulatory relief under the business-friendly administration of Republican President Donald Trump, cheered the deal as a positive signal for the industry.
“While this legislation could go much further, ABA still views this bipartisan bill as an important first step in right-sizing the rules for America’s banks,” Rob Nichols, president and CEO of the American Bankers Association said in a statement.
The House of Representatives has already passed a broad rewrite of the Dodd-Frank law, but Senate agreement is necessary before the Republican-led Congress can approve easing rules for banks.
Industry expectations on a final deal had been muted because Senate Republicans need eight Democrats to support their efforts in order to pass changes to the post-crisis rules.