Today, President Trump signed into law a plan that would ease regulations for small banks, scaling back the Dodd-Frank Act, which was passed in response to the 2008 financial crisis. Tribally-owned banks as well as small and regional banks that tribes do business with will be impacted by the legislation. The bill passed in the Senate back in March and in the House of Representatives on Tuesday evening.
Impact on Small and Regional Banks
Under S.2155, the threshold for what are known as “systemically important financial institutions” would be raised to $250 billion in assets from $50 billion, reducing the number of banks subject to heightened regulatory scrutiny. Banks with less than $250 billion in assets would no longer have to go through annual "stress tests" to demonstrate that they can survive a crisis – like that of 2008.
Although most of the Dodd-Frank regulations would be unchanged, the bill would exempt banks with less than $10 billion in assets from what is known as the “Volcker Rule,” which was designed to prevent banks from using depositors’ money to make speculative investments. Small banks would also be exempted from a Dodd-Frank requirement that they report extensive data on borrowers.
Impact on Individual Native Americans and Military Members
Consumer-focused provisions in the plan would allow people to freeze and unfreeze credit reports without paying a fee, give active-duty members of the military free credit monitoring, and prevent student loan lenders from declaring a loan in default because a co-signer dies or declares bankruptcy.
Impact on Financial Management
The passing of S.2155 does not impact the funding that the Government Accounting Standards Board (GASB) receives. A provision in Dodd-Frank allows the foundation to charge a fee for GASB’s role in setting government financial standards. The fee is paid by broker-dealers regulated by the Financial Industry Regulatory Authority, or FINRA, that trade in the municipal bond market.
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S.2155 - Economic Growth, Regulatory Relief, and Consumer Protection Act
Dodd-Frank Wall Street Reform and Consumer Protection Act