WASHINGTON — Sen. Sherrod Brown, the top Democrat on the Banking Committee, took to the Senate floor Thursday afternoon to reiterate concerns over the Republican effort to move financial reform legislation through a must-pass spending bill.
With the unveiling of major bipartisan highway legislation earlier this week, all eyes are now turned to the yearend budget fight.
Brown's remarks follow those by several progressive colleagues on Wednesday to stop any amendments from going through that could potentially undo recent financial reforms. The Obama administration has also said repeatedly that it would not approve any language that would undercut the Dodd-Frank Act.
"This move, unprecedented in scale, shows that Republicans will try to ram their agenda through Congress any way possible," Brown said.
Republicans are pushing hard for the inclusion of a variety of policy riders on everything from the funding of Planned Parenthood to a controversial Department of Labor rule for retirement investment advisors.
Bankers, meanwhile, are watching closely to see if Sen. Richard Shelby, R-Ala., will be successful in attaching all or part of his sweeping regulatory reform legislation into the spending package, which must be approved by Dec. 11 to avoid a government shutdown. The bill would raise a $50 billion Dodd-Frank threshold for heightened regulatory standards to $500 billion, giving regulators the discretion to name smaller banks as "systemically important" when warranted. It would also make changes to the Financial Stability Oversight Council and the Federal Reserve, as well as provide some regulatory relief for smaller institutions.
"Senate Republicans are now working to move this controversial bill — this repeal, this rollback, this slicing of Dodd-Frank — to roll back reforms through the appropriations process," Brown said, referring to Shelby's bill.
Shelby and Brown reportedly talked for months to see if a bipartisan compromise could be reached, though the two sides remain at an impasse. Brown released his own targeted regulatory relief package for the smallest banks over the summer, backed by Democrats on the banking panels in both chambers.
Brown, a member of the highway bill conference committee, also pointed to the host of bipartisan regulatory relief measures included in that deal, such as those that will loosen annual privacy notice standards and extend the exam cycle for some small banks.
"We are helping in this bill, we are helping those community banks to be more efficient, and be able to cut some of their administrative costs and still protect consumers," Brown said. "What people want to do in the back room on the omnibus bill is jam all kinds of issues through the Senate that, frankly, are weakening Dodd-Frank [and that] will challenge and undermine the financial stability of our system."
He warned that this year's move follows the same playbook as last year, when Republicans were able to successfully insert a rollback of a key Dodd-Frank swaps provision into must-pass spending legislation.
"What we know is they again want to do Wall Street's bidding — not on the floor of the Senate, we're not debating these issues on the floor — they want to do backroom deals to take care of their Wall Street friends," he said.
Meanwhile, many in the banking industry are marshalling their own efforts in support of Shelby's legislation. A coalition of 53 state banking associations wrote a letter to the Senate asking for consideration of the package, given Congress's lack of action on regulatory relief in recent years.
"Congress has held many hearings in recent years establishing the need to turn back the tide of excessive, prescriptive regulations that hinder banks' ability to serve their customers — your constituents — and help grow the economy," the Dec. 3 letter says. "Yet still little concrete reform has been enacted. In fact, while Congress has been debating how to correct the regulatory imbalance, thousands of additional pages of complex rules have been added to the books."
The letter adds that Shelby's bill "represents a real opportunity to provide targeted relief in areas identified as warranting congressional attention."