- Key insight: Sen. Katie Britt, R-Ala., is introducing a bill that would raise the regulatory thresholds for many banks, putting them in less strict regulatory categories.
- Forward look: The bill is unlikely to win Democratic support or be a priority if Democrats take over the House or Senate next year, but the idea could be a candidate for riders on must-pass legislation.
- What's at stake: The bill would tether bank regulatory thresholds to economic growth, raising the thresholds as the economy expands.
WASHINGTON — Sen. Katie Britt, R-Ala., will introduce companion legislation to a key part of House Republicans' bank deregulatory push, according to a copy of the bill obtained by American Banker.
Britt will introduce a version of the TIER Act today, which would index bank regulatory thresholds to economic growth. House Financial Services Committee Chairman French Hill of Arkansas and Rep. Andy Barr of Kentucky — who is
Some of the provisions of the TIER Act were included in House Republicans'
But with crypto legislation and other priorities, Hill's packages have struggled to find time in the Senate Banking Committee. Britt's bill gives Hill an open ally in the Senate Banking Committee to get some policymaking time.
"Bank regulation should be based on an institution's actual size, complexity, and risk, not on arbitrary thresholds that become increasingly outdated with every passing year," Britt said in a statement. "When our economy grows but these thresholds remain frozen in place, banks can be pushed into regulatory categories that Congress never intended for them to be simply because of economic growth."
Britt's bill differs from the House version in a few ways. While both bills would periodically adjust some regulatory thresholds over time to the economy's growth, Britt's bill includes a one-time adjustment upon enactment.
Britt's bill would also require the Federal Reserve to evaluate whether nominal gross domestic product or the Consumer Price Index is the more appropriate measure for each covered threshold and adjust those thresholds accordingly. Indexing to GDP rather than inflation has also been flagged as a Democratic concern in previous hearings.
Republicans in the current Congress have been
Rep. Bill Foster, D-Ill., led a "dear colleague" letter ahead of the Main Street Capital Access Act House floor vote to try to whip Democratic votes in favor of the package, challenging House Financial Services Committee ranking member Rep. Maxine Waters, D-Calif., who whipped against the bill.
Democrats Jim Himes of Connecticut, Vicente Gonzalez of Texas and Josh Gottheimer of New Jersey joined Foster in the letter. The package ultimately passed the House 270-155 with some Democratic votes.
House Financial Services Committee leaders worked with Democrats, specifically on what would be acceptable to them on the tailoring and indexing issues, suggesting this could be an area where they continue to compromise in the next Congress.
Democrats are unlikely to prioritize bank deregulatory bills if they win the gavels of either chamber this fall, but there are still opportunities for riders on must-pass bills during the lame duck period between November's elections and the changeover in January.
