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As Treasury Secretary Jacob Lew defended the legacy of the 2010 reform law, in another part of the capital a banker and Republican lawmakers pleaded for legislative changes.
July 8 -
In the aftermath of passage of a sweeping law like Dodd-Frank, sharp divisions are common. What's unusual is the way the divide has persisted five years later, and in many ways has even hardened.
July 1
WASHINGTON Two of the Senate's staunchest regulatory hawks said Tuesday that more vigilance is necessary in the foreseeable future to counter persistent efforts to undermine reforms coming out of the financial crisis.
In separate speeches at an event commemorating the Dodd-Frank Act's anniversary, Sens. Elizabeth Warren, D-Mass., and Sherrod Brown, D-Ohio, criticized Republican attempts to chip away at the law five years after its passage.
Warren was particularly incensed by a provision in a GOP-sponsored regulatory relief bill to raise the asset threshold for "systemically important" banks which opens them up to tougher supervision from $50 billion to $500 billion.
The Massachusetts senator said several banks that contributed directly to the financial crisis including Countrywide and Washington Mutual were above the current threshold but below the one proposed in the bill authored by Senate Banking Committee Chairman Richard Shelby. Raising it would eliminate regulatory protections that Dodd-Frank put in place, she said.
"These bigger banks and their allies in Congress are now pressing to raise that threshold and exempt dozens of banks from these tougher standards," Warren said at the event sponsored by the Americans for Financial Reform. "Even though the failure of a single $50 billion bank may not be enough to cause a financial crisis, the failure of a few banks of that size would be enough to threaten our markets."
Brown, the Senate committee's ranking Democrat, said Republican efforts to roll back Dodd-Frank's provisions as a whole or in part are standing in the way of reaching bipartisan compromise that could improve the law and lower the regulatory burden.
He said he would likely look favorably on legislation to lower the regulatory requirements for community banks and even identify alternative or standardized compliance mechanisms for midsized banks. But there are deep concerns among Democrats that any concession to the GOP would open the door to broader and more sweeping changes that would undermine the law.
"Their mission is always to find ways legislatively, by intimidation of regulators, all kinds of ways to undermine Dodd-Frank," Brown said.
An agreement between the committee's Democratic and Republican leaders "to oppose amendments that would further weaken Dodd-Frank in a way that is unacceptable to the stability of the financial system" is a "major prerequisite" for further negotiations, Brown said.
