WASHINGTON (AP) - A bipartisan group of senators on Monday announced a deal on legislation to provide banks and credit unions relief from some of the stricter regulatory requirements approved after the 2008 financial crisis.
The lawmakers said the measure is targeted at helping local community banks, but it also includes regulatory relief for larger financial institutions. For example, the agreement would raise the threshold at which bank holding companies are considered too big to fail and are subject to stricter capital and planning requirements. Under the agreement, the threshold moves from $50 billion in assets to $250 billion.
The bill is much narrower than what the House passed earlier this year in an effort to undo much of the financial law, known as Dodd-Frank. That bill had no chance of gaining the 60 votes necessary to overcome a filibuster in the Senate.
Sen. Mike Crapo, R-Idaho, chairman of the Senate Committee on Banking, Housing and Urban Affairs, worked with Democratic lawmakers behind the scenes to fashion a compromise. The 18 co-sponsors of the bill include nine Democrats and nine Republicans.
The American Bankers Association said that lifting the threshold for "systemically important institutions" will spare more banks from regulatory requirements that made little sense for institutions of their size. The group also said "we think further adjustments are warranted," but that it viewed the bill as "an important first step in right-sizing the rules for America's banks."
During hearings on proposed changes to Dodd-Frank, business groups and lawmakers had complained that the stricter regulations put into place after the crisis were making it harder for banks to lend money and grow the economy, though witnesses also noted that banks are in much better shape to withstand another economic crisis.
Sen. Sherrod Brown, D-Ohio, had also been working with Crapo on the bill, but he announced that he could not support the measure. He said banks are doing just fine and made record profits last year.
"I understand my colleagues' interest in agreeing to this legislation, but disagree on the wisdom of rolling back so many of Dodd-Frank's protections with almost no gains for working families," said Brown.