Dodd-Frank Misdirection Hides a Pressure Point
Focus on big banks masks growing risk in commercial lending for smaller ones.
Watch closely.
Photographer: London Express/Getty Images
Proponents of the rollback of Dodd-Frank financial regulations — which the House passed on Tuesday and is known unofficially as the Crapo bill for the Republican Idaho senator who has pushed it through — have said none of the changes should raise fears of another financial crisis. House Speaker Paul Ryan cheered the bill, implying the only rules being scrapped were those that were never needed in the first place and were actually damaging the economy.
Most of that assessment seems to be based on the fact that relatively few of the bill’s benefits will go to the nation’s biggest banks. The most notable change will raise the asset level at which banks start to face stricter regulation from the Federal Reserve and others to $100 billion from $50 billion for some regulations and as high as $250 billion for the most stringent ones. Companies as big as American Express Co. and SunTrust Banks Inc. will soon no longer have to undergo the scrutiny of public annual stress tests. (Changes elsewhere, of course, could lead to the end of the stress tests entirely.)