WASHINGTON (AP) - The Senate moved closer Tuesday to passing legislation to roll back some of the safeguards Congress put in place to prevent a repeat of the financial crisis. Enough Democrats supported a procedural vote on the bipartisan bill to ensure its passage by the Republican-majority Senate.
The move to alter some key aspects of the Dodd-Frank law comes ten years after the financial crisis rocked the nation’s economy. The bill has overwhelming Republican support and enough Democratic backing that it’s expected to gain the 60 votes necessary to clear the Senate. That was reflected in the 67-32 vote Tuesday, with 16 Democrats and one independent voting to move ahead with consideration of the bill.
Several Democratic lawmakers facing tough re-election races this year have broken ranks with Minority Leader Chuck Schumer, D-N.Y. and Sen. Elizabeth Warren, D-Mass.
Nonpartisan congressional analysts say the legislation would slightly increase the probability of a big bank failure or another financial meltdown - deemed to be small under current law. The new assessment by the Congressional Budget Office estimates the bill would increase federal deficits by $671 million between 2018 and 2027 if it became law.
But the bill’s proponents insisted it would bring a needed boost to beleaguered banks outside Wall Street that didn’t engage in the reckless practices that fueled the financial crisis.
“This bill recognizes a simple truth: Small community banks and Main Street credit unions are not the same a multitrillion-dollar banks on Wall Street,” Senate Majority Leader Mitch McConnell said on the Senate floor before the vote. Under Dodd-Frank, he said, “Small-scale lenders have been subjected to a litany of new regulatory, compliance and (inspection) demands that were designed with the country’s largest banks in mind. Dodd-Frank’s enormous regulatory burden has been inefficient and unhelpful for financial institutions of all sizes, but it has hit Main Street lenders especially hard.”