Sen. Steve Daines, R-Montana, joined President Donald Trump on Thursday as he signed into law a measure to loosen restrains from banks that were put in place after the financial crisis hit in 2008.
Sen. Jon Tester, D-Montana, helped write the bill and serves as a member of the Senate Banking Committee, though he was not invited to the signing,
“Our landmark legislation tosses out harmful regulations, so local lenders can provide startup capital to entrepreneurs and mortgages to first-time home buyers,” Tester said in a statement. “Today marks years of relentless negotiating, collaboration and compromise.”
The measure cleared the House and Senate this week despite Sen. Elizabeth Warren’s attempts to derail it by billing it as a gift to Wall Street.
Under the legislation, banks with assets greater than $250 billion will remain subject to stricter requirements around risk management and liquidity. That’s more than the $50 billion threshold set by Dodd-Frank, which Congress passed after the 2008 crash.
“Montana’s rural banks, credit unions and customers have been the biggest victims of Dodd-Frank,” said Daines. “It was great to join the president at the White House to finally takes steps to provide relief to our rural communities.”
Both Daines and Tester contend that Dodd-Frank hurt Montana by eliminating small community banks and credit unions, and by limiting consumer access to their services.
Since the passage of Dodd-Frank, Daines said, the number of state-chartered banks in Montana has fallen from 64 to 44, marking a 31 percent decline. He attributed that decrease to the consolidation of small community banks that haven’t been able to keep pace with past regulations.
The number of federally insured credit unions in Montana has also fallen from 57 to 51, Daines said.
Tester expressed similar sentiments as the bill wound its way through Congress.
“Community banks and credit unions didn’t cause the financial crisis, but they have suffered under the one-size-fits-all rules designed specifically to rein in risky behavior on Wall Street,” Tester said in March. “When a community bank is bought out by a big bank, their business model changes and it is no longer tailored to fit the needs of the community.”
The bill will allow banks with less than $10 billion in assets to participate in certain types of trading. Some smaller banks will also have lesser reporting requirements around their lending practices.
The bill passed the House on a a 258-159 vote and the Senate by 67-31. Democrats called it a gift – one that would bring the banking industry back to the conditions that resulted in the financial crisis.
“It rolls back key safeguards for American consumers,” Rep. Nancy Pelosi, D-California, said before the House voted this week. “It opens the door to lending discrimination and it potentially threatens the stability of our financial system and our economy.”