At this time of intense political polarization and gridlock in Congress, the U.S. Senate has demonstrated, by passing S. 2155, that Republicans and Democrats can come together and approve landmark legislation that will greatly benefit consumers and small businesses in Idaho and across the country.
Now it is time for the U.S. House of Representatives to take up S. 2155 and show that it can also pass good legislation, solve problems and wisely govern the country.
S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, sponsored by Sen. Mike Crapo, R-Idaho, amends the Dodd-Frank Act that was passed to rein in the enormous Wall Street investment banks after the 2008 financial crisis and the ensuing market crash.
As a community banker, I have been living with the provisions of the Dodd-Frank Act for a decade. While that law included many good provisions and was well-intentioned, it also swept up small community and regional banks in many of the same extremely onerous regulations as the massive Wall Street banks.
The ultimate losers have been small businesses seeking to expand, and individuals and families needing credit to remodel a home or purchase a new one.
Dodd-Frank eliminated much of the flexibility and prerogatives of local bankers to extend credit to even long-time clients and customers. Strong relationships, experience, good judgment and common sense in some cases had to be cast aside to comply with one-size-fits-all regulations from Washington. Compliance costs also skyrocketed, with even small banks having to hire an army of specialized lawyers and accountants to deal with a mountain of regulation and oversight.
As chair of the Senate Banking Committee, Sen. Crapo has been studying the effects of Dodd-Frank for many years and has carefully documented its negative impact on consumers and small businesses. Working closely with Democrats on his committee, regulators, the financial services industry, and consumer watchdog groups, he crafted legislation to eliminate the more egregious regulations of Dodd-Frank, while still protecting consumers and bolstering economic growth. His bill passed the Senate on a strong bipartisan vote of 67-31.
Sen. Crapo deserves praise for his persistent focus on this legislation over many years and his desire to make it bipartisan legislation that solves serious problems.
In Idaho, we face housing shortages and rapidly increasing home prices and rents. Sen. Crapo’s legislation could help alleviate the housing crunch by loosening credit both for home and apartment builders, and for families seeking to mortgage a home.
Crapo’s bill is careful not to go too far by making credit too loose and easy to obtain. The financial services industry will still be heavily regulated, and consumers will be protected from unsafe and predatory sales practices. Bankers do not want to extend credit to people who will default. Everyone loses when that happens.
The legislation strikes the right lending balance to keep the wheels of commerce turning with small businesses, individuals and families able to obtain the credit they need and can afford.
Today, S. 2155 awaits action in the House of Representatives. I hope Idaho’s House delegation will support it and encourage their colleagues to do likewise. The House Financial Services Committee has been active in sending to the Senate bipartisan legislation that would also meaningfully reform the Dodd-Frank regulations. S. 2155 includes many of those House provisions. If S. 2155 passes the House, the president has said he will immediately sign it into law.
Sen. Crapo summed up his bill this way: “This bill is a bipartisan compromise, the changes are commonsense, and it will allow financial institutions to better serve their customers and communities, while maintaining safety and soundness and important consumer protections. At a time of intense political polarization, we have proven that we can work together to get things done. This is good for small financial institutions, good for small business, and good for families across America.”
Editor’s note: Zions Bank is a sponsor of Idaho Politics Weekly.