Connelly: Larsen breaks with fellow Dems, backs partial Dodd-Frank rollback
Rep. Rick Larsen, D-Wash., broke with fellow state Democrats on Tuesday, and voted with Republicans for a partial rollback in banking rules, enacted in the Dodd-Frank Act to curb abuses that fueled the Great Recession.
The legislation exempts medium-sized and small banks from rules imposed on the banking season. According to the New York Times, the legislation will leave fewer than 10 big banks in the U.S. subject to stricter oversight.
The legislation relieves banks with assets under $250 billion, and was described by House Speaker Paul Ryan as helping with "freeing our economy from over regulation."
The Dodd-Frank rollback, already passed by the Senate, goes to President Trump for his signature. It passed the House on a 258-159 vote, with Larsen and 32 other Democrats voting in favor.
Democratic Reps. Adam Smith, Pramila Jayapal, Derek Kilmer, Denny Heck and Suzan DelBene voted against the rollback. All four Republicans in the Washington House delegation backed the measure.
" . . . I am proud that today we are taking an important step in scaling back these onerous restrictions on our community banks and credit unions," Tweeted Rep. Cathy McMorris Rodgers, R-Wash., a member of the House Republican leadership.
Larsen, who represents a Northwest Washington district, cast his vote as a measure to "improve small business and rural community lending."
While the bill is "not perfect," it "provides a measured approach and brings much needed relief for community banks and credit unions across the Second District," Larsen said. "I voted for the bill because it will help streamline financial services for Washington state consumers, small businesses and the community-based financial institutions that serve them."
Sen. Elizabeth Warren, D-Mass., who helped draft the banking rules, put a very different perspective on her Twitter account.
"For years, armies of bank lobbyists and executives have groaned about how financial rules are hurting them. But there's a big problem with their story -- banks are making record profits. Congress has done enough favors for big banks -- the House should reject the #BankLobbyist Act."
Larsen, in a statement, quoted bank lobbyists and bank executives praising his vote for the legislation.
"This bill also simplifies complex requirements to make responsible lending to local small businesses, particularly in rural communities," he said.
"For instance, it will help reduce the cost burden many Washingtonians like folks in South Whidbey, experience when trying to find a licensed appraiser for small rural mortgage loans."
(Larsen has trouble with contentious liberals when he holds town meetings on South Whidbey Island.)
The legislation rewards small banks with relaxed mortgage regulations, and lets them avoid rules designed to discourage banks from making risky bets in trading.
The legislation would, however, protect small lenders from mortgage disclosure requirements enacted with the purpose of countering discrimination in bank loans.
Larger banks and credit card companies got a big chunk of relief. The legislation would create exemptions from Federal Reserve oversight for banks with $50 billion to $250 billion in assets, Politico reported.
Beneficiaries include such not-so-small financial institutions as American Express and SunTrust.
The provisions led House Democratic leader Nancy Pelosi to describe the legislation as "another Republican giveaway to big banks."
While 33 Democrats voted in favor, not one Democratic House member stood on the floor to speak for the bill.
Banks have recovered handsomely from the Great Recession.
The Federal Deposit Insurance Corp. reported Tuesday that the combined net income of America's commercial banks and savings firms totaled $56 billion for the first three months of 2018, up 27.5 percent from the first quarter of 2017.