Following the 2008 bank bailouts, one of the major pieces of legislation aimed at making sure such a thing could never happen again was the 2010 Dodd-Frank Act. The 849-page Act introduced 27,000 new regulations on the financial sector. (RELATED: Trump Issued 400% Fewer Major Regulations Than Obama Did In His Final Year).
As a result of those regulations, compliance costs for small banks have skyrocketed. Virtually no new banks have been chartered since Dodd-Frank was passed, and 1/5th of community banks have disappeared.
On Tuesday the House of Representatives voted 258-159 to roll back Dodd-Frank, with 33 Democrats backing the effort.
According to the Daily Wire:
One result of the new legislation: fewer than 10 big banks in the United States will be subject to stricter federal oversight; thousands of banks with less than $250 billion in assets will not be considered systemically important to the financial system. Thus only banks with $250 billion or more will be subject to more regulations, including the Federal Reserve’s annual stress tests.
House Speaker Paul Ryan said the bill would lead to “freeing our economy from overregulation … Our smaller banks are engines of growth. By lending to small businesses and offering banking services for consumers, these institutions are and will remain vital for millions of Americans who participate in our economy.” Before Dodd-Frank, 75% of banks offered free checking. Two years after it passed, only 39% did so … Bank fees have also increased due to Dodd-Frank, leading to a rise of the unbanked and underbanked among low- and moderate-income Americans.
Prior to the House approving the legislation, the Senate passed it by a 67-31 vote, with 17 Democrats joining with Republicans to approve it. Some Democrats in smaller or more rural states reliant on smaller banks championed the legislation for removing a costly burden off of those community banks.
Dodd-Frank was one of the most costly regulations passed during Barack Obama’s presidency, and now like thousands of others, has been erased.
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