The Economic Growth, Regulatory Relief, and Consumer Protection Act passed in the US House of Representatives 258 – 159.
The legislation contains several provisions, among the most noteworthy:
- Permits banks with between $50-$250 billion in assets to run with less regulatory oversight from the Financial Stability Oversight Council (FSOC).
- Exempts banks with less than $10 billion in assets from some rules entirely, most notably the so-called Volcker Rule which bans banks from making some forms of speculative trades.
- Requires the Federal Reserve to take size of banks into account when crafting regulations, rather than “one size fits all” regulations as critics contend the Fed has been doing for the past decade.
- A loophole allowing huge foreign banks to avoid regulations by tallying their US assets in ways that keep them under that $250 billion threshold. An amendment offered by Democrats to close the loophole was rejected.
The Investment Company Institute released a statement on the bill’s passage: “We applaud this bipartisan action to make commonsense reforms that will allow financial institutions to better serve their customers. This legislation will help avoid requiring ill-suited, bank-like stress tests of mutual funds, streamline the offering of closed-end funds, and ensure that protections under the Investment Company Act of 1940 extend to investors in US territories such as Puerto Rico.”