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house Bill H.R. 4771

Should Banks be Considered Small if They Have Up to $3 Billion in Assets Instead of $1 Billion?

Argument in favor

Applying the Federal Reserve’s policy statement to bank holding companies with up to $3 billion in assets rather than only those with under $1 billion will allow firms to make more investments with businesses and consumers in the communities they serve.

Matthew's Opinion
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02/08/2018
No constitutional authority to regulate banks anyway. Leave that up to states.
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Mart's Opinion
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02/06/2018
That's the banks' decision, but then NO bailouts.
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libertyLOL's Opinion
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02/08/2018
Less regulations for smaller banks? Yes please. Go ahead and increase that to 50 billion while you are at it. Think Deregulation is what caused 2008? Go read a book. This was a good start: https://tomwoods.com/your-friends-still-think-deregulation-caused-the-financial-crisis/
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Argument opposed

By expanding the policy statement to cover banks that are three times larger than those it originally covered, this bill could cause covered banks to engage in more risk-taking and ultimately lead to more small bank failures.

Kara's Opinion
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02/08/2018
There's nothing small about 1billion dollars, upping that definition to3billion is fucking ridiculous. Do y'all just enjoy watching the economy be ruined? Cause that's the only reason you'd be voting for this, so don't say we didn't warn you when this fails.
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A.B.'s Opinion
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02/08/2018
All of this loosening of financial regulation can only lead to another crash. This particularly seems like a way to have large banks branch off into “small” subsidiaries and increase our risk.
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Michael's Opinion
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02/06/2018
It was less than a decade ago that reckless lending practices nearly destroyed the economy. Is our collective memory really that short?
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on Banking, Housing, and Urban Affairs
  • The house Passed February 8th, 2018
    Roll Call Vote 280 Yea / 139 Nay
      house Committees
      Committee on Financial Services
    IntroducedJanuary 11th, 2018

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What is House Bill H.R. 4771?

This bill would require the Federal Reserve to expand its policy statement on the allowable debt levels of small bank holding companies to apply to firms with less than $3 billion in assets, rather than only firms with less than $1 billion in assets. Banks under the threshold are exempt from a prohibition on engaging in significantly leveraged (i.e. debt-financed) nonbanking activities, although the Federal Reserve can apply the policy to banks at risk of failing. The change would take effect within six months.

Impact

Small bank holding companies; and the Federal Reserve.

Cost of House Bill H.R. 4771

The CBO estimates that enacting this bill would have an insignificant impact on the budget.

More Information

In-DepthSponsoring Rep. Mia Love (R-UT) introduced this bill to help small banks around the country access capital and make loans in their communities:

“Smaller banks are the lifeblood of many local communities in Utah. They support the credit needs of low and middle income families as well as the small businesses, farmers, and entrepreneurs that create jobs. Community banks are a  major, and sometimes the only, lending source for a lot of hard working and ambitious people. When these community banking institutions are overwhelmed with regulations and mandates — many of which are meant for larger institutions — it is the hard working Americans in those communities that suffer. The exemptions provided in this bill will make it easier for small banks and thrifts to continue operating in communities that would otherwise lack sufficient banking services.”

Original cosponsor Rep. Josh Gottheimer (D-NJ) added:

“Community banks are an essential element of our communities — helping our families buy homes and small businesses get off the ground in North Jersey. But these economic engines have been under historic pressure from new, unnecessarily burdensome regulations. Regulatory relief and cutting bureaucratic red tape will increase access to capital for community banks and their customers — our Jersey families and businesses.”

Some House Democrats expressed opposition to this bill in its committee report:

“Tripling the Policy Statement threshold to $3 billion at this time is wholly unfounded. There has not been sufficient time to see what effect previously doubling the Policy Statement threshold to $1 billion just a few years ago really means for community banks and the communities they serve. Congress should examine the data and consider the benefits and costs before making further changes.”

This legislation passed the House Financial Services Committee on a 41-14 vote and has the support of two Democratic cosponsors. During the last Congress, Rep. Love offered a similar bill which raised the assets threshold from $1 billion to $5 billion, which passed the House on a 247-171 vote.


Media:

Summary by Eric Revell

(Photo Credit: M.O. Stevens / Creative Commons)

AKA

Small Bank Holding Company Relief Act of 2018

Official Title

To raise the consolidated assets threshold under the small bank holding company policy statement, and for other purposes.

    No constitutional authority to regulate banks anyway. Leave that up to states.
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    There's nothing small about 1billion dollars, upping that definition to3billion is fucking ridiculous. Do y'all just enjoy watching the economy be ruined? Cause that's the only reason you'd be voting for this, so don't say we didn't warn you when this fails.
    Like (45)
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    All of this loosening of financial regulation can only lead to another crash. This particularly seems like a way to have large banks branch off into “small” subsidiaries and increase our risk.
    Like (36)
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    Share
    It was less than a decade ago that reckless lending practices nearly destroyed the economy. Is our collective memory really that short?
    Like (25)
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    All banks should be held to the strictest standard, and the CFPB needs to be un-neutered
    Like (23)
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    Read history, learn from it. Super simple stuff.
    Like (17)
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    Increasing the definitive size of what is considered "small" doesn't help American consumers or make their financial services more secure.
    Like (16)
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    I don’t even think $1 billion is small. $3 billion is definitely not small. Stop finding ways to let billionaires shirk the law while causing the working class to suffer.
    Like (14)
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    No. Just no. Stop empowering the banks and corporations at the expense of the people.
    Like (14)
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    No, need more regulations on banks else we will have another collapse. How quickly people forget how that mess was created....
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    Another excuse to rape the public
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    There is no additional benefit to Americans when banks become huge, only additional risk. Furthermore, the fraudulent practice of fractional reserve lending, makes all savings and loan type banks literally money making machines, inventing new dollars every day.
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    Remember the crash?
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    SMALL biz benefit should target ma-n-pa bizs. Easy to find a smaller threshold than $1B in an era of oligarchal-sized “small” bizs. I agree: un-neuter CFPA.
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    Why on Earth are we voting to repeat literally the exact same thing that led us to the crash of 2008? Have we not learned ANYTHING?!
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    No I’m supportive of only very conservative bank policies. Weren’t these the folks that had a principle role in our last financial meltdown at the end of the W. Bush administration? Yes they were. Just No.
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    How many times will we allow banks to get in over their heads and then expect taxpayers to pick up the tab? All banks need to be regulated to protect the consumers and the taxpayers.
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    Is this another bright idea from Mulvaney - the guy who thinks consumers should not be protected from predatory financial institutions? Do any of you study or even remember history? Banks are playing with the money deposited by their clients. There should be no regulation, law, proposal or thought passed to undermine the protections each bank customer deserves. You have an obligation to PROTECT THE CITIZENS, NOT THE BUSINESSES.
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    Regulations on ALL banks need to be strong and strict. ALL banks, regardless of size, need to be held accountable. ALL banks need to be transparent to the public. It is the people’s money they are handling.
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    This bill would be disastrous to consumers, and could eventually lead to the crash of the economy (again) because banks engage in risky behavior.
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