Senators Want to Roll Back Bank Regulations on the 10-Year Anniversary of the 2008 Financial Crisis

The Wall Street bull in lower Manhattan. A bipartisan bill that would roll back bank regulations imposed in the wake of the 2008 financial crisis appears to have enough support to pass the Senate, although liberal lawmakers are speaking out in opposition of it. Spencer Platt/Getty Images

Congress can't pass a bipartisan plan on immigration or gun control, but it appears close to voting in favor of a bill that rolls back banking regulations as the 10-year anniversary of the financial crisis approaches.

Democrats are torn on the bill, with a dozen members co-sponsoring the legislation while liberal senators, like Sherrod Brown of Ohio, lead the charge against it.

"Ten years after the financial crisis, banks are making record profits and benefiting from a massive tax giveaway," Brown told Newsweek. "Congress should be fighting to help working families, not rolling over for banks and doing the bidding of Wall Street."

Senator Elizabeth Warren, a Democrat from Massachusetts, also opposes the bill.

"I'm amazed that, on the tenth anniversary of the 2008 financial crisis, some Democrats are supporting the Trump administration and Senate Republicans on a bill to roll back the financial rules we put in place," Warren told Politico.

The bill rolls back some regulations from the 2010 Dodd-Frank Act, which placed restrictions on banks in the wake of the financial crisis. Lawmakers say the new legislation would benefit smaller regional banks by raising the asset threshold that subjects banks to increased federal oversight and regulation. The bill would bump that marker from $50 billion to $250 billion.

Senator Mike Crapo, a Republican from Idaho, introduced the Economic Growth, Regulatory Relief and Consumer Protection Act in November and was hoping to schedule a vote on it after the Presidents Day break, Politico reported.

Senator Jon Tester of Montana is among the Democrats backing the measure. "Main Street businesses and lenders tell me they need some regulatory relief if we want jobs in rural America," he said in a December statement.

But it's not just innocuous community banks this bill offers relief to, Warren argued. The bill would allow companies like Countrywide Financial—which was the largest mortgage lender when the market collapsed and engaged in some of the most predatory mortgage deals—to escape increased scrutiny, she told Politico.

"Remember Countrywide?" she said. "It was about $200 billion, which is smaller than some of the banks that will be deregulated by this bill. The heart of this bill is to take 30 of the 40 biggest banks in this country off the watch list so that they can load up on risks again and if things go wrong put the American taxpayer back on the hook."

Senator Heidi Heitkamp, a North Dakota Democrat and a member of the Senate Banking Committee, is among the party's moderates backing the bill. In a November statement, she touted the bill as an example of bipartisanship that helps small businesses and banks in rural communities across the country.

"I'm fighting for rural America—and that's what our bipartisan bill is about," she said. "It would provide needed relief to community banks and credit unions, so they can continue enabling small businesses to get financing to operate, helping farmers get loans to support their farms, and allowing families to buy homes in rural communities across our state."

Heitkamp told Politico the bill has the votes to pass the Senate. But it may face opposition from conservatives in the House, where Republicans want a more significant repeal of Dodd-Frank.