Is A Two-Tiered Regulatory System On The Way?

May 2, 2017 at 9:22 am Leave a comment

It is always a little dangerous to read too much into what the Trump Administration is saying on a given day, but when Donald Trump and Elizabeth Warren agree on something it’s worth paying attention. And when it has to do with relieving small lending institutions of the burdens imposed by Dodd-Frank it is enough to get even a hardened cynic excited to think that maybe, just maybe, Washington really will give us some meaningful mandate relief after all.

The American Banker is reporting that at a meeting with community banks yesterday the President called for the creation of a two-tiered regulatory system. While the President has made similar calls in the past, as the AB explains “ his willingness to speak to so many bankers at once, combined with comments by his senior advisers who also attended, sent a strong message to attendees.”

Trump’s comments sent me searching for this article from four years ago, in which none other than Senator Elizabeth Warren confessed that she was concerned that Dodd-Frank may have not gone far enough in making distinctions between big and small banks. She openly wondered “whether or not we are reaching a point where we should really think about a two-tiered regulatory system.”

Intriguing isn’t it? Surely if this odd couple of political extremes can agree on something as basic as regulatory reform it is worth taking seriously. Then again, Warren’s comments were almost four years ago. Now that she is preparing to run for the Presidency, perhaps any attempt to forge common ground with Republicans would doom her chances with a Sanders-infused primary base that would view any agreement with Trump as political apostasy.

Conversely, it would be nice to think that regulatory reform could emphasize helping small intuitions. In reality, it will rise or fall based on issues of importance to the largest banks, such as scaling back Dodd-Frank restrictions on divertive trading and capital requirements.

But maybe, just maybe, we can get something done here.

Supreme Court Rules That Cities Can Sue For FHA Violations

In an extremely significant ruling yesterday, the Supreme Court ruled 5 to 3 that the city of Miami could sue Wells Fargo and Bank of America under the Fair Housing Act for discriminatory lending practices between 2004 and 2012. But there is a catch. For the city to ultimately win the case, it not only has to prove that the banks acted illegally and that the resulting harm to the city was foreseeable, but that the harm was directly caused by the banks’ misconduct. There is a lot that needs to be said about this decision, and I will be following up with additional thoughts later in the week. I know you can’t wait!

On that note – Let’s be careful out there!!!

Entry filed under: General.

State regulators file legal challenge to OCC fintech charter If You Provide Overdrafts You Will Want To Read Today’s Blog

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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