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house Bill H.R. 6392

Should Risk Factors Other Than Size be Considered When Designating a Bank as Systemically Important?

Argument in favor

The financial services industry is extraordinarily complicated. As a result, the industry’s regulations should consider how interconnected a bank is when determining whether it is systemically important rather than simply labelling all banks with more than $50 billion in assets as such.

geilt's Opinion
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12/01/2016
This Bill increases the pool of banks that could be considered important, which includes smaller banks that aren't following regulatory standards or may decide to create more risk for themselves than would be safe. Because they are under the 50b of assets mark they may be flying under the radar. The lack of regard in big banking caused a huge issue for the economy in 2008 but it's not to say smaller banks may not be adding wood to the fire undetected. If the big banks are still considered significant and regulated I think this bill would benefit the people by holding up and coming banks to the same standards and to make sure shady practices aren't increasing their assets to get to that or stay just under that 50b mark.
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Christian's Opinion
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12/01/2016
Their connections within the political realm should be considered
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pluckydoodle's Opinion
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12/02/2016
As it is, only the size of a bank is considered. This doesn't take into account the multiple facets that make each bank. With this bill, banks can be more appropriately designated and proper actions in regards to a bank's actions will more likely be taken.
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Argument opposed

There needs to be stricter regulation on big banks after the havoc they wreaked on America’s economy during the financial crisis. Banks that are bigger than $50 billion are systemically important, other factors need not be considered.

Jenni's Opinion
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11/30/2016
This bill does nothing for community banks. It eliminates many of the Dodd-Frank financial reform rules for 30 of the biggest banks in the country. Banks this big – like Washington Mutual and Countrywide – were at the heart of bringing down our economy during the 2008 financial crisis. By replacing any mandatory rules for regulation with discretionary ones, it can be claimed that it is merely improving the system by putting the decisions in the hands of the experts instead of members of Congress. Those same "experts" are the ones making boatloads of money whether big banks fail or succeed and were part of the problem to begin with.
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bh763's Opinion
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12/02/2016
Under current Dodd-Frank laws, banks that are overseeing capital of more than $50 billion dollars receive a higher amount of oversight to insure the stability of the bank under a financial collapse. Basically saying they must have enough money around when the next bubble pops to insure there aren't mass layoffs and tighter restrictions on lending. Both of which are terrible for the strength of the US economy. With this legislation, a committee could decide whether or not a bank is important enough for it to receive this scrutiny and oversight. This is just a ploy at taking down Dodd-Frank and deregulating the banks that had a large part to play in the most recent global recession. That's why I say vote Nay.
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Cole's Opinion
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12/02/2016
As shown by the crash of 2008, banking is not an area in which we need less regulation.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house Passed December 1st, 2016
    Roll Call Vote 254 Yea / 161 Nay
      house Committees
      Committee on Financial Services
    IntroducedNovember 22nd, 2016

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    This Bill increases the pool of banks that could be considered important, which includes smaller banks that aren't following regulatory standards or may decide to create more risk for themselves than would be safe. Because they are under the 50b of assets mark they may be flying under the radar. The lack of regard in big banking caused a huge issue for the economy in 2008 but it's not to say smaller banks may not be adding wood to the fire undetected. If the big banks are still considered significant and regulated I think this bill would benefit the people by holding up and coming banks to the same standards and to make sure shady practices aren't increasing their assets to get to that or stay just under that 50b mark.
    Like (9)
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    This bill does nothing for community banks. It eliminates many of the Dodd-Frank financial reform rules for 30 of the biggest banks in the country. Banks this big – like Washington Mutual and Countrywide – were at the heart of bringing down our economy during the 2008 financial crisis. By replacing any mandatory rules for regulation with discretionary ones, it can be claimed that it is merely improving the system by putting the decisions in the hands of the experts instead of members of Congress. Those same "experts" are the ones making boatloads of money whether big banks fail or succeed and were part of the problem to begin with.
    Like (43)
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    Under current Dodd-Frank laws, banks that are overseeing capital of more than $50 billion dollars receive a higher amount of oversight to insure the stability of the bank under a financial collapse. Basically saying they must have enough money around when the next bubble pops to insure there aren't mass layoffs and tighter restrictions on lending. Both of which are terrible for the strength of the US economy. With this legislation, a committee could decide whether or not a bank is important enough for it to receive this scrutiny and oversight. This is just a ploy at taking down Dodd-Frank and deregulating the banks that had a large part to play in the most recent global recession. That's why I say vote Nay.
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    As shown by the crash of 2008, banking is not an area in which we need less regulation.
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    No such thing as "too big to fail"!
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    The automatic designation needs to stay, the additional risk profiles are a good idea but should apply as an addition to the 50billion floor not instead of. So risk profiles to add smaller institutions in addition to those already designated.
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    As it is, only the size of a bank is considered. This doesn't take into account the multiple facets that make each bank. With this bill, banks can be more appropriately designated and proper actions in regards to a bank's actions will more likely be taken.
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    If there is one thing I have a learned working in an auditable industry its that the more complex and human driven a process is, the more subject it is to gamesmanship. If you want the systemic import of a bank to be yet another political football for Wall Street, this is a great bill. If you are trying to protect the economy, keep it simple.
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    When will the American people stop taking this abuse from big banks?
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    It worries me that the American Bankers Association supports this legislation.
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    Their connections within the political realm should be considered
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    Seems like a more clear-cut and precise economic regulation that would work better than the usual one-size-fits-all approach Washington usually tries to take. Any clear cut and precise legislation is better than a blanket one-size-fits-all legislation
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    This bill, if used correctly, could help prevent another crisis like 2008. Yes, banks are big, but they are also interconnected, merging, colluding, and trying to cheat the system - so the system had to change. This is a step in the right direction, only if it leads to more tailored regulations and not a free license to repeat 2008.
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    Banks are complicated. While size is correlated with bank failure it's not the only cause for systemic risk. In fact FDIC itself creates moral hazard problems and should be reevaluated.
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    If SIFI designation is so burdensome, then why does it exist? The reason is to end “too big to fail.” No one wants to be in another situation in which some firms are saved (AIG), some are hitched to a new parent (Bear Stearns and Merrill Lynch), and only exceptional firms are allowed to fail (Lehman Brothers). The SIFI system may not be perfect, but going forward, firms should be less likely to fail and if they indeed deserve to fail, they can do so without taking down the rest of the system.
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    Connection to those in the congress and in other parts of congress should be considered as well
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    Come up with the process to designate and regulate BEFORE repealing the only protection in place now. I'm not interested in seeing another Great Recession, while robber barons run off with money sans repercussions. Get your act together congress. You work for us!
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    Cannot repeat what had happened with the banks years back.
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    While I believe more metrics can often introduce unnecessary complexity, this is a case in which current regulations are over-simplifying how banks are considered significant enough for increased regulations. It covers loop-holes surely some banks are taking advantage of to avoid being regulated.
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    I don't entirely trust the motivations of this new regulation, and I am likewise fearful of the result of increased banking regulation. In general, I prefer that big banks be held more accountable for their lack of transparency and size. I am unsure if this will entirely help in this respect, and likewise am wary to think that these banks will find ways to work past this regulation.
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