Financial Services Regulatory Reform Legislation: Senators Introduce Bipartisan Regulatory Reform Bill

Sullivan & Cromwell LLP - November 20, 2017
Read More

On November 16, a bipartisan group of Senators, led by Senate Banking Committee Chairman Mike Crapo (R-ID), introduced the “Economic Growth, Regulatory Relief, and Consumer Protection Act” (the “Senate Bill”). The legislation would revise various post-crisis regulatory requirements and provide targeted regulatory relief to certain financial institutions. Among the most significant of its proposed amendments to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) are a substantial increase in the $50 billion asset threshold for automatic regulation of bank holding companies (“BHCs”) as systemically important financial institutions (“SIFIs”), an exemption from the Volcker Rule for insured depository institutions with less than $10 billion in consolidated assets and lower levels of trading assets and liabilities, as well as amendments to the Liquidity Coverage Ratio (“LCR”) and Supplementary Leverage Ratio (“SLR”) requirements. Also included is an exemption from the U.S. Basel III based capital requirements for smaller banking organizations that voluntarily maintain a leverage capital ratio of at least 8–10%. The legislation was introduced with nine Republicans, nine Democrats, and one Independent (who caucuses with the Democrats) as original co-sponsors, bipartisan backing that could prove significant, as its ultimate passage in the Senate may require at least 60 votes.

The Senate Banking Committee is scheduled to consider the legislation on December 5, 2017.