Ten years after global investment bank Bear Stearns’ near collapse, which kick started the Great Recession, the United States Senate is easing financial regulations meant to prevent a future one.
South Dakota US Senator Mike Rounds says those regulations, the Dodd-Frank Act are burdensome to community banks. He voted in favor of the bill.
US Senator Mike Rounds says the one-size-fits-all approach of the Dodd-Frank Act impacts community banks in South Dakota. He says because of that smaller banks must deal with “onerous” paperwork that larger banks comply with.
The legislation redefines too-big-to-fail banks as those with $250 billion in assets, as opposed to the $50 billion in assets under Dodd-Frank. Those too-big-to-fail banks are subject to tougher regulations under federal rules.
Rounds says the federal reserve and other management organizations will still keep an eye on banking activity, particularly for those with around $100 billion in assets.
“But, for up to $100 billion, look, you’re not going to get tested like you were before. You’re weren’t part of the problem before. Most certainly this is going to relieve some of the compliance costs from before, which are in many of the small towns and communities across the upper mid-west. They weren’t part of the problem then, they aren’t part of any problem now," Rounds says. "For the larger bank, above $250 billion, we didn’t relieve them of the stress testing. Those are all still in place. Those guidelines are still in place."
The bill that passed the Senate had bi-partisan support and passed 67 to 31.
Rounds says the bill has a tougher climb in the US House. He says House Republicans want to see more restrictions rolled back than what the Senate passed.