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Friday, March 16, 2018

Senate passes bill easing restrictions on smaller banks, which make most loans to agriculture

The Senate passed a bill this week to ease restrictions on small- and mid-sized banks that provide half of all small business loans and 80 percent of agricultural loans. Republican Sen. Mike Crapo's bill went to the House on a 67-31 vote; all 51 Republicans supported it, as well as 16 Democratic senators and one independent, mostly from rural states, who worked out bipartisan compromises with the Idahoan.

"The bill makes a five-fold increase, to $250 billion, in the level of assets at which banks are deemed to pose a potential threat if they failed. The change would ease regulations and oversight on more than two dozen financial companies, including BB&T Corp., SunTrust Banks, Fifth Third Bancorp and American Express," Kevin Freking and Marcy Gordon report for The Associated Press. "Crapo, chairman of the Senate Committee on Banking, Housing and Urban Affairs, emphasized that the Federal Reserve would still have the authority to apply tougher standards for banks with between $100 billion and $250 billion in assets."

The restrictions were first passed as part of the Dodd-Frank law after the 2008 financial crisis. Under it, banks that are "too big to fail" must be assessed by the Federal Reserve each year to make sure they have enough capital to survive an economic shock, and must also submit a plan called a "living will" that detail how they would liquidate assets if they fail so as not to hurt the financial system.

The bill would also exempt some banks and credit unions from having to report some mortgage loan data such as the applicant's age, credit score, total loan costs and interest rate. Democratic Sen. Elizabeth Warren of Massachusetts, who opposed the bill, argued it would make it easier for banks to discriminate against minority applicants without anyone noticing. The bill would also require free credit freezes for consumers affected by data breaches such as the one from Equifax.

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