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Dodd-Frank Reform Efforts Intensify

On November 16, Senate Banking Committee (“SBC”) Chairman Mike Crapo (R-ID) introduced S. 2155, the “Economic Growth, Regulatory Relief and Consumer Protection Act,” long-awaited Senate legislation designed to foster economic growth and reduce regulatory burdens for small- and medium-sized financial institutions. A SBC section-by-section summary of the bill is available here. Earlier this year, the House passed on a party-line vote H.R. 10, the “Financial CHOICE Act of 2017” (the “FCA”), House Financial Services Committee Chairman Jeb Hensarling’s (R-TX) bill to comprehensively reform the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). S. 2155 is narrower in scope than the House bill and has to date garnered the support of nine Democratic Senators.

The Senate bill was influenced, in part, by the responses that Chairman Crapo and SBC Ranking Member Sherrod Brown (D-OH) received from the public about proposals to spur economic growth. It is also thought to have been partly influenced by the recommendations set forth in the U.S. Department of the Treasury’s (the “Treasury”) reports that President Trump’s Executive Order 13772 on Core Principles for Regulating the U.S. Financial System requires the Treasury to release about possible ways to legislatively and administratively reform the U.S. financial system. Three such reports have been released, and one additional report is expected to be issued soon. For additional information about the reports and ongoing Dodd-Frank reform efforts, please see the K&L Gates Alerts entitled “Treasury Reports Continue to Inform Dodd-Frank Reform Efforts” and “Dodd-Frank Reform; What Comes Next?

Among the most notable aspects of S. 2155 is a provision (Section 401) that would increase the systemically important financial institution (“SIFI”) threshold and, thus, the application of enhanced prudential standards to bank holding companies (“BHCs”) from $50 billion to $250 billion. Those BHCs that have total consolidated assets between $50 billion and $100 billion would immediately be exempt from these standards. And those that have total consolidated assets between $100 billion and $250 billion would be exempt for 18 months after enactment of S. 2155 (the “effective date”). For BHCs that fall into the latter category, the Federal Reserve Board would (among other things) be required to subject these institutions to periodic stress tests after the effective date. In addition to the SIFI provision, S. 2155 also contains provisions that would enhance consumer access to residential mortgage loans, furnish tailored regulatory relief to community banks, and require certain regulatory agencies to study and report to Congress on cybersecurity threats and algorithmic trading.

In the coming days, the House is expected to continue to advance on a stand-alone basis provisions of the FCA that enjoy bipartisan support, and many of these measures could be considered and passed by the full Senate. It also remains plausible that such stand-alone reform measures could be included as part of unrelated legislative vehicles that must be passed before year’s end. Notably, the SBC has scheduled a markup of S. 2155 for December 5, 2017, setting the stage for possible consideration by the full Senate. As reform efforts proceed on these parallel tracks, interested stakeholders should monitor developments closely and consider opportunities to influence policy outcomes. 

Copyright 2020 K & L GatesNational Law Review, Volume VII, Number 326



About this Author

Daniel Crowley, KL Gates Law Firm, Public Policy Attorney

Dan Crowley is a partner in the firm’s Washington, D.C. office. His practice is focused on public policy issues relating to financial services and capital markets.

Mr. Crowley represents category-leading financial services clients across a broad range of policy issues including accounting & financial reporting, broker-dealer & securities trading, commodities & futures, corporate governance, depository institutions, derivatives & securitization, hedge funds, insurance, investment management, mortgage banking & consumer finance, and retirement...

Bruce Heiman, KL Gates Law Firm, Public Policy Attorney
Practice Area Leader — Policy / Regulatory

Bruce Heiman engages in a wide ranging federal counseling and lobbying practice. He has represented leading companies and trade associations in technology, financial services, postal, trade, transportation and manufacturing industries. He is one of two Practice Area Leaders of K&L Gates’ Policy and Regulatory Practice and serves on the firm’s Management Committee. He is nationally ranked as a top government relations lawyer by both Chambers USA and The Legal 500.

Mr. Heiman regularly assists clients design and implement a Washington, D.C. “game plan” to protect and promote their interests before Congress and federal departments and agencies. He helps them pursue legislation, implement enacted laws, and achieve their objectives in industry meetings as well as government negotiations. He also often helps clients assemble and advocate on behalf of a coalition of parties with similar objectives, including interest groups and think tanks. He writes and speaks frequently and is often quoted in the media on current developments.

William Kirk, KL Gates Law Firm, Tax and Financial Services Attorney

Bill Kirk, a partner at K&L Gates, represents clients before Congress and Executive Branch agencies with emphasis on tax, financial services, corporate and transportation and infrastructure matters. Mr. Kirk’s clients include public and private entities such as major corporations and national trade associations for whom he provides policy analysis and strategic advice and engages in advocacy with the Congress and Executive Branch agencies. He also has significant experience representing emerging and middle market firms on legal and policy matters (e.g., minority and...

Karishma Page, KL Gates Law Firm, Public Policy Attorney

Based in Washington, D.C., Karishma Shah Page is a member of K&L Gates’ Public Policy and Law Practice. Ms. Page concentrates her practice on federal legislative and regulatory policy, focusing on tax, financial services, retirement, health care, and employee benefits issues. Ms. Page has extensive experience working on a variety of tax legislation, the Dodd-Frank Wall Street Reform and Consumer Protection Act, retirement legislation, the Affordable Care Act, and related rulemaking and regulatory activity.

Ms. Page develops and implements a...

Eric A. Love, KL Gates, Capital Markets Compliance Lawyer, Treasury Legislation Attorney
Law Clerk

Eric A. Love is a member of K&L Gates’ Public Policy and Law Practice and is based in the Washington, D.C. office. Mr. Love focuses on federal legislative and regulatory policy issues related to financial services and capital markets, with a particular emphasis on securities and corporate governance. 

Prior to joining K&L Gates, Mr. Love served as a special assistant in the Office of Legislative Affairs at the U.S. Department of the Treasury. In this capacity, he worked to help advance Treasury’s legislative agenda on a broad portfolio...