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In Victory for Trump, Congress Approves Dodd-Frank Rollback

Legislation heads to president's desk
By Newser Editors and Wire Services
Posted May 22, 2018 5:32 PM CDT
President Donald Trump walks down the steps of the Capitol building after a luncheon with Irish Prime Minister Leo Varadkar, Thursday, March 15, 2018, in Washington.   (AP Photo/Jose Luis Magana)

(Newser) – Congress moved Tuesday to dismantle a chunk of the rules framework for banks, installed to prevent a recurrence of the 2008 financial crisis that brought millions of lost jobs and foreclosed homes. The House voted 258-159 to approve legislation rolling back the Dodd-Frank law, notching a legislative win for President Donald Trump, who made gutting the landmark law a campaign promise, the AP reports. The Republican-led legislation, pushed by Wall Street banks as well as regional banks and smaller institutions, garnered some votes from House Democrats. Similarly, the bill splintered Democrats into two camps when the Senate voted 67-31 to approve it in March.

The bill raises the threshold at which banks are deemed so big and plugged into the financial grid that if one were to fail it would cause major havoc. Those banks are subject to stricter capital and planning requirements. The legislation is aimed at especially helping small and medium-sized banks, including community banks and credit unions. But critics argue that the likelihood of future taxpayer bailouts will be greater once it becomes law. They point to increases in banks' lending and profits since Dodd-Frank's enactment in 2010 as debunking the assertion that excessive regulation of the banking industry is stifling growth. Trump is probably eager to sign the bill. "We're going to be doing a big number on Dodd-Frank," he promised just weeks after taking office last year, complaining that the regulations choked lending, cramped the economy, and hampered job creation.

(Read more Dodd-Frank stories.)

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