Congress sends bank regulation rollback to Trump

Nearly 10 years after Congress moved to protect the nation from spiraling into another financial crisis, the House passed a bill Tuesday that would roll back many regulations meant to keep banks in check.

Bill S2155, also known as the Economic Growth, Regulatory Relief, and Consumer Protection Act, would ease federal oversight and regulations for small banks. Proponents say the bill, which has bipartisan support, tailors regulations to the size of the bank.

The bill is seen as a win for smaller community banks. But some argue that it goes too far, unraveling portions of the 2010 Dodd-Frank Act.

“I’m all for helping community banks and credit unions, but this bill goes way beyond that and includes massive giveaways to Wall Street that will open the door to another financial crisis,” Rep. Maxine Waters of California said in a statement.

Waters, a Democrat and the ranking member of the House Financial Services Committee, was one of 159 representatives who voted against the bill. But 258 of their colleagues, including 33 Democrats, voted for it.

Passage of the bill follows publication of a yearlong investigation by Reveal from The Center for Investigative Reporting that found that people of color were significantly more likely to be denied a conventional mortgage than their white counterparts in 61 metropolitan areas across the country.

Reveal’s analysis was based on publicly available data released through the Home Mortgage Disclosure Act. The data detailed nearly every time someone tried to buy a home in 2015 and 2016. But the bill could make similar analyses more difficult.

Some banks would be exempted from having to report mortgage applications to the federal government under the act. The bill also would gut provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act requiring mortgage lenders to disclose to the government information about loan applicants, including key credit score data that lenders have fought to keep private for years.

In March, Democratic Sen. Elizabeth Warren of Massachusetts cited Reveal’s findings when she warned members of Congress that the new bill would make it harder to track discrimination.

“If this bill passes, there will be entire communities where there will be no data whatsoever – which means there will be no ability to monitor whether people are getting cheated because of their race or their gender,” Warren said.

Reveal’s analysis of Home Mortgage Disclosure Act data showed lending disparities in large metros such Atlanta, Washington and Detroit, as well as in smaller areas such as Bellingham, Washington; Chico, California; and Tuscaloosa, Alabama. These disparities persisted even after accounting for applicants’ incomes, the size of their loans and characteristics of the neighborhoods where they sought to buy property.

S2155 passed the Senate with a 67-31 vote earlier this year and now moves to President Donald Trump’s desk.

Emmanuel Martinez can be reached at emartinez@revealnews.org. Follow him on Twitter: @emanthedataman.