January 21, 2019

U.S. House of Representatives Sends Regulatory Relief Bill to President’s Desk

On May 22, The House of Representatives voted 258-159 to pass a banking deregulation bill (S.2155) that loosens rules and requirements imposed on lenders by the Dodd-Frank Act of 2010. The legislation contains a number of provisions affecting community banks and institutions below the $10 billion asset threshold, as well as measures designed to assist lenders above this ceiling.

Senate Republicans and Democrats jointly crafted S.2155, The Economic Growth, Regulatory Relief, and Consumer Protection Act, with the goal of spurring conditions for growth rather than engaging in a concerted effort to repeal and replace the Dodd-Frank Act. The House this month agreed to bring S.2155 to a floor vote, without amendments, following a weeks-long standoff between House Republican leadership and their Senate counterparts over whether to add new provisions to the bill. President Trump urged House Republicans to pass the bill and has stated that he will sign S.2155 as it currently stands.

Community Banks (Under $10 billion)

  • Creates a new “Community Bank Leverage Ratio,” defined as the ratio of capital to unweighted assets. Banks with a ratio above 8 percent-10 percent will be exempt from all other leverage and risk-based capital requirements. Regulators may disqualify a bank from this relief based on an assessment of the bank’s risk profile.
  • Exempts banks from the Volcker Rule if their total trading assets and liabilities comprise less than 5 percent of their overall assets.
  • Permits institutions that are not well-capitalized to accept reciprocal deposits if they meet other standards and restricts the amount of interest that may be paid on these deposits.
  • Grants federal prudential regulators the discretion to allow banks under $5 billion in assets to file Call Reports semi-annually rather than quarterly.
  • Amends the Fed’s Small Bank Holding Company Policy Statement by increasing the eligibility asset threshold size from less than $1 billion to less than $3 billion.
  • Broadens the classes of institutions eligible for QM lending, under certain conditions, and requires that loans with QM status be held in portfolio over their lifetime by the originator. 
  • Provides relief from the three-day waiting period under TRID if a second mortgage offer results in a lower APR. This section also calls on CFPB to provide more definitive guidance on TRID.

Community and Mid-Sized Banks

  • Relaxes HMDA reporting requirements for institutions that originate fewer than 500 closed-end mortgages or open-end lines of credit in each of the two prior years, subject to achieving certain CRA ratings.
  • No longer requires publicly traded banks with less than $50 billion in assets to create mandatory risk committees.
  • Raises the threshold for company-run stress tests from $10 billion to $250 billion.
© Polsinelli PC, Polsinelli LLP in California


About this Author


David Allred believes that excellent client service begins with strong relationships. David is a member of the Banking and Financial Institutions practice and represents both publicly traded and privately held banks at all stages of the business cycle, from formations to a mature business. As an accountant and an attorney, David brings a unique perspective to providing corporate advice to clients in ever-changing regulatory environments. He has served banks on a broad range of complex legal issues including: 

  • Mergers and acquisitions
  • ...
Phil Feigen, Polsinelli Law Firm, Corporate transaction attorney, Washington DC
Office Managing Partner

Phil Feigen brings a unique perspective to providing general corporate advice, as well as complex business counsel to clients in ever-changing regulatory environments.  For more than 20 years, Phil has been providing guidance with respect to Small Business Investment Companies and other Small Business Administrative regulations, federal and state banking laws and federal securities laws. 

Phil focuses on helping clients through the SBIC licensing process so that they may realize the benefits of the program and increase the amount of investment dollars they are able to manage in their funds. While he works with funds of all sizes, Phil’s experience has been focused on specialty funds under $300 million.

Sylvia Kornegay, Legislative Affairs,  Polsinelli Law Firm, Washington DC
Legislative Director

Having spent time on Capitol Hill, Sylvia joined Polsinelli with an extensive legislative background in financial services, agriculture, energy, and budget and appropriations issues. She has worked for Congressman Joseph Crowley (New York) and Congressman Michael A. Arcuri (New York), where she developed numerous bills and amendments and served as staff contact to the Blue Dog Coalition. Sylvia has drafted legislation to streamline and restructure the enrollment process for our nation’s veterans into the U.S. Department of Veterans Affairs system, to alleviate economic...