Dodd-Frank rollback: Why deregulation is a huge win for credit unions
Last week ushered in a big legislative win for credit unions on Capitol Hill. Following a major industry push to reverse restrictions that Dodd-Frank legislation placed on credit unions after the 2008 financial crisis, the “Economic Growth, Regulatory Relief and Consumer Protection Act,” better known as S. 2155, was passed by Congress and signed into law by President Donald Trump. The new legislation is a first step towards providing relief to smaller banks and credit unions from what some would call costly and burdensome rules.
The new law raises the threshold for which a bank can be considered too big to fail from $50 billion to $250 billion, easing restrictions and Federal Reserve Board oversight for smaller banks. In addition, it also introduces a number of new rules around lending and consumer protections (see the full list of rules introduced by S. 2155).
What S. 2155 Means for Credit Unions
“We lose about a credit union a day, and it’s mostly because of the regulatory burden,” said Dan Berger, CEO of the National Association of Federal Credit Unions. The hope is that this new law will enable credit unions to focus more on their business instead of diverting capital and resources to satisfying regulatory requirements.
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