By Jeff Bater
A prominent banking group called on the new Congress to work “in a bipartisan manner” as it prepares for a re-evaluation of Dodd-Frank, but didn’t ask lawmakers for a repeal of the 2010 law.
A Jan. 4. letter by Rob Nichols, president of the American Bankers Association, to House and Senate leaders included a broad list of legislative priorities for the 115th Congress. The industry group seeks changes to mortgage rules and wants oversight of financial innovation. Other policy goals outlined in the letter were cybersecurity, small-dollar credit and money laundering.
The letter was addressed to Senate Majority Leader Mitch McConnell, Senate Minority Leader Charles Schumer, House Speaker Paul Ryan and House Minority Leader Nancy Pelosi.
Nichols wrote that a declining number of banks have had to endure headwinds posed by increased prescriptive government regulation and competition from less-regulated financial players. Since 2006, more than 1,500 banks have failed, been acquired or merged, while only four new bank charters have been granted, he said.
“There are many factors beyond the Dodd-Frank Act that have caused the closure and consolidation of banks, but the sheer weight of more than 24,000 pages of proposed and final rules of this law has become a key consideration for many institutions in determining their future,” Nichols wrote. “That is why ABA is calling on the Administration, Congress and bank regulatory agencies to work in a bipartisan manner to pursue legislative changes that will keep financial institutions strong and capable of fulfilling their mission.”
The lack of a call for repeal of Dodd-Frank is in line with remarks by others on the possible fate of the law. Sen. Bob Corker (R-Tenn.), for instance, told Bloomberg BNA in December he thinks its excesses will be repealed on a bipartisan basis. Jamie Dimon, head of JPMorgan Chase, said in an appearance at a financial-services conference that the goal isn’t “a wholesale throwing out of Dodd-Frank.”
The ABA, addressing the relatively new area of fintech in its letter, called on lawmakers to facilitate partnerships of banks and technology firms and ensure customers are protected through “consistent and effective oversight of all providers.”
The group also seeks tailored regulation that fits individual bank business models and risk profiles. The letter called for an elimination of “artificial and arbitrary” regulatory asset thresholds.
Last month, House Republicans secured approval of a lame-duck bill that proposed loosening the systemic risk designation process established for banks under Dodd-Frank. Supporters criticized the process of designating as systemically risky any bank with assets above $50 billion, saying such an approach doesn’t account for differences in business models.
To contact the reporter on this story: Jeff Bater in Washington at email@example.com
To contact the editor responsible for this story: Michael Ferullo at MFerullo@bna.com
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