Both U.S. senators from Delaware voted for legislation that loosens restrictions on smaller banks. The bill seems likely to pass the Senate.
This bill amends the Truth in Lending Act to allow institutions with less than $10 billion in assets to waive ability-to-repay requirements for certain residential mortgage loans. Other mortgage-lending provisions related to appraisals, mortgage data, employment of loan originators, manufactured homes, and transaction waiting periods are also modified.
The bill also amends the Bank Holding Company Act of 1956 to exempt banks with assets valued at less than $10 billion from the “Volcker Rule,” which prohibits banking agencies from engaging in proprietary trading or entering into certain relationships with hedge funds and private-equity funds. Certain banks are also exempted by the bill from specified capital and leverage ratios, with federal banking agencies directed to come up with new requirements.
The bill amends the United States Housing Act of 1937 to reduce inspection requirements and environmental-review requirements for certain smaller, rural public-housing agencies.
Provisions relating to enhanced prudential regulation for financial institutions are modified, including those related to stress testing, leverage requirements, and the use of municipal bonds for purposes of meeting liquidity requirements.
The bill requires credit reporting agencies to provide credit-freeze alerts and includes consumer-credit provisions related to senior citizens, minors, and veterans.
Both U.S. Sens. Tom Carper and Chris Coons went against a majority of Democrats opposed to the bill. Nearly all Republicans voted yes on the measure that according to critics would bring back risky practices that led to tough times for the financial services industry about a decade ago.