The changes, in an amendment unveiled late Wednesday by the bill’s sponsor, Sen. Mike Crapo (R-Idaho), would give the Federal Reserve authority to continue strict oversight of foreign banks and allows active duty members of the military to receive free credit monitoring while deployed.
The proposed changes would have to be approved by the Senate, which is slated to vote on the legislation in coming days.
Senate Republicans, with the support of more than a dozen Democrats, are pushing legislation that would mark the most significant revision of banking rules since Congress passed 2010’s Dodd-Frank Act in response to the global economic crisis. The bill would exempt about two dozen financial companies with assets between $50 billion and $250 billion, including American Express, Ally Financial and Barclays, from the toughest banking regulations. These banks would no longer be labeled “too big to fail,” allowing them to forego a yearly stress test to prove they could survive another period of economic turmoil. It also relieves small banks from having to follow mortgage and other rules put in place after the financial crisis.
The amendment offered by Crapo would expand the bill, adding elements already approved in the House where some Republicans have complained the Senate version does not go far enough. That could make it more likely that House Republicans would accept the bill whole rather than potentially making changes that would scare off Democratic supporters in the Senate.
“This is a clear effort to buy support from the House” especially Rep. Jeb Hensarling (R-Tex.), chair of the House Financial Services Committee, Jaret Seiberg, a financial-services analyst for Cowen Washington Research Group, said in a research note. “It contains several new provisions that the House either has passed or has been considering.”
But Hensarling does not appear convinced. “The House will not be ignored,” Hensarling said on NPR’s On Point. “There are two different sides of the Capitol. We will not rubber-stamp what the Senate does.”
The proposed changes are not likely to help the bill to gain support from Democratic opponents, who argue that the legislation increases the chances of taxpayer bailouts in the future. “This substitute does not make this bill better,” Sen. Sherrod Brown (D-Ohio) said in a floor speech Thursday. “By papering over its fundamental problems … it may even represent a step backward.”
Dozens of other amendments have also been offered for the legislation, but it is unclear how many will be adopted or even voted on. Many of the amendments were offered by one of Wall Street’s biggest critics, Sen. Elizabeth Warren (D-Mass.), who does not support the legislation. “The people of Massachusetts didn’t send me here to fight for big banks. They sent me here to fight for them. And so long as I am privileged to hold this job, that’s exactly what I’m going to do,” Warren said in a Medium post Thursday.