This afternoon, President Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act) into law. The Act was passed by the House on Tuesday by a vote of 258 to 159 and by the Senate on March 14 by a vote of 67 to 31.
Although the Act does not make the sweeping changes to the Dodd-Frank Act contemplated by other proposals, it nevertheless provides welcome regulatory relief to both smaller and larger financial institutions. After President Trump signed the Act, CFPB Acting Director Mick Mulvaney issued a statement applauding Congress for passing the Act and indicating that he is “pleased to see the long-overdue reforms to the regulations governing mortgage lending.” Mr. Mulvaney also stated that he “stand[s] ready to work with Congress and the rest of the Administration to implement these new reforms that will promote a brighter, more prosperous future.”
On June 19, 2018, from 12 p.m. to 1 p.m. ET, Ballard Spahr attorneys will hold a webinar—Economic Growth, Regulatory Relief, and Consumer Protection Act: Anatomy of the New Banking Statute. The webinar registration form is available here.
In addition to the changes regarding mortgage lending, the Act makes a number of changes to provisions of federal laws regarding credit reporting, and loans to veterans and students. It also reduces the regulatory burdens on financial institutions—particularly financial institutions with total assets of less than $10 billion. Bank holding companies with up to $3 billion in total assets would be permitted to comply with less-restrictive debt-to-equity limitations instead of consolidated capital requirements. This change should promote growth by smaller bank holding companies, organically or by acquisition. Larger institutions should benefit from the higher asset thresholds that would apply to systemically important banks subject to enhanced prudential standards. The higher thresholds may lead to increased merger activity between and among regional and super regional banks.
For a summary of some of the Act’s key provisions applicable to financial institutions, click here for our full alert.