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The rollback of the financial regulations last week associated with Dodd-Frank has many Georgia community banks, regional banks and industry groups singing its praises.

What is Dodd-Frank?

The Dodd-Frank Act (fully known as the Dodd-Frank Wall Street Reform and Consumer Protection Act) is a United States federal law that places regulation of the financial industry in the hands of the government. The legislation, which was enacted in July 2010, created financial regulatory processes to limit risk by enforcing transparency and accountability.

Georgia’s own U.S. Senator David Perdue (R-GA), who sits on the Senate Banking Committee, assisted in crafting the legislation to deregulate Dodd-Frank. The legislation was widely supported on both sides of the aisle.

“This regulatory relief is long overdue. Community and regional banks have been hammered by one-size-fits-all government regulations enacted by Dodd-Frank for nearly eight years. As a result, two trillion dollars are sitting on the sidelines, not at work in our economy today. This regulatory rollback, combined with all the regulatory rollbacks of last year, the historic tax cuts, and President Trump’s actions on energy, will continue to revive our economy. This will make a lot more capital available to all of our job creators on Main Street.” – U.S. Senator David Perdue of Georgia.

The vote for the bill was as follows:

Vote Counts:
YEAs – 67
NAYs – 31
Not Voting – 2
The legislation included three major provisions to roll back the regulations of Dodd-Frank:
  • Increase Access To Mortgages- The bill exempts community banks and credit unions that keep mortgages on their own books from the CFPB’s qualified mortgage rule. Today, many small banks and credit unions lack the staff and budget to comply with the thousand-page, one-size-fits-all CFPB qualified mortgage rule and portfolio lending will help restart mortgage lending in small-town America.
  • Separate Regional Banks from Hundred Billion Dollar Banks– The current asset threshold for the designation of systemically important financial institutions (SiFi) is so low it encompasses regional banks, subjecting them to the same regulations and reporting requirements as the largest banks in the world. The bill raises SiFi threshold from $50B to $250B and enhances regulators powers to oversee banks with assets that fall between $250B and $100B.
  • Improve Consumer Credit Protections– Creates a new national standard for credit protections so all consumers, regardless of where they live, have the ability to freeze their credit easily. In addition, veterans and elderly will have increased access to more credit monitoring resources.

What is Georgia’s business leaders saying about the new rollbacks?

Community Bankers Association of Georgia: “On behalf of Georgia’s community banks, we appreciate Senator Perdue co-sponsoring S. 2155. Relief targeted at community banks like our members will deliver a substantial economic benefit for Main Street small businesses and local communities across our nation.” – Rob Braswell, President and CEO, Community Bankers Association of Georgia

Carver State Bank (Savannah): “Despite our strong commitment to promoting access to capital among underserved groups, the implementation of the expanded HMDA and new Small Business Lending Disclosure requirements will have a major impact on our bank – even though institutions like ours were not the ones engaged in the kind of discriminatory lending practices that these new requirements are designed to prohibit. We believe that a narrow exemption like the one set forth in S. 2155 strikes the right balance between relief for our institution, while still imposing reporting requirements that can facilitate the kind of fair lending enforcement activity that we fully support to ensure that our communities’ credit needs are met.” – Robert James II, Senior Vice President, Carver State Bank

Georgia Chamber of Commerce: “Community and regional banks play an important role in economic development. By lending to local businesses, these banks provide capital that keep communities growing. Rolling back regulations that have made it harder for banks to do their business is an important part of helping communities of all sizes across Georgia.” – Chris Clark, President and CEO, Georgia Chamber of Commerce

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