Loan Officer | NMLS #194146
Branch NMLS #1194581
Posted On March 06, 2018
The Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) is heading to the Senate for a vote this week. The bill, with bipartisan support from 20 co-sponsors, would bring some of the most significant changes to Dodd-Frank legislation, since its passage almost ten years ago. While Dodd-Frank reform has been a topic of discussion in the housing industry for years, neither a repeal nor a rewrite has survived both houses of Congress. Last year, a previous bill, the Financial CHOICE Act (H.R. 10) died on the Senate floor after receiving only partisan support.
The Dodd-Frank Act was passed in 2010 to reform banking practices in the United States and to protect consumers from predatory financial institutions and facilitate economic recovery. However, since it was enacted, the legislation has remained virtually unchanged, despite evolving economic trends and a changing lending landscape.
The Economic Growth, Regulatory Relief and Consumer Protection Act would provide regulatory relief for many regional banks and smaller financial institutions. It would not repeal Volcker Rule trading restrictions or drastically restructure the Consumer Financial Protection Bureau (CFPB). Supporters include housing industry advocacy groups such as the Mortgage Bankers Association (MBA), the National Association of Home Builders (NAHB), and the Independent Community Bankers of America.
NAHB executive vice president and chief lobbyist, James Tobin, expressed his support for the bill explaining that it will “address the challenging credit conditions that home builders and home buyers continue to experience as a result of the regulatory response to the recent financial crisis.”
According to Federal Reserve Chair Jerome Powell’s testimony last week, the national economy has strengthened. Unemployment is near record lows, inflation is near the targeted rate, and consumer spending is strong. As economic conditions change, post-Financial Crisis legislation is likely to be updated to continue to foster growth.