Notes from Angus: My response to constituent inquiries on the Senate Banking Bill

To the reader: Below is my response to constituents who have expressed concern regarding S. 2155. In recent years, I have benefited from an amazing amount of personal engagement with Maine people who want to make sure their voices are heard. I often receive a total of 5,000 e-mails, phone calls, and letters each week, and this input is incredibly important to my work in Washington. I believe that when someone takes the time to write or call with a question or comment, I should take the time to get back to them with a comprehensive and meaningful answer. That is why I have a group of bright people on my Washington staff who organize all my incoming messages and help me to research and draft responses. While my other responsibilities keep me from drafting all of my response from the start, I scrutinize each one to make sure that it is no different than if I had. As many folks already forward and share my responses on common questions and big issues with their friends and family, I am hopeful that by directly publishing some of the most widely distributed responses on my Medium account, I can keep even more Maine people informed on my positions.

I cosponsored and voted for S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, because it provides targeted and much-needed regulatory relief for small banks and credit unions without decreasing the safety and soundness of our financial system or compromising the core of the Dodd-Frank Act. The bill’s intent and many of its provisions were badly mischaracterized in the debate leading up to its passage; here are the principal arguments made against the bill and the responses that persuaded me that the bill would be a net benefit to Maine’s consumers and communities.

CHARGE: This bill is a major rollback of the 2010 Dodd-Frank Act.

FACT: In the words of Former Representative Barney Frank, a key architect of the bill, “if the bill [S. 2155] became law tomorrow, well over 90 percent of the Wall Street reform bill would be unchanged.” While this bill does modify the Dodd-Frank Act, its main thrust is to provide limited regulatory relief to small, mid-size, and regional financial institutions. In fact, when asked directly if he agrees with the argument that the bill would increase the likelihood of another financial crisis, he said, “greatly disagree… and I think that’s a misreading [of the bill].” Representative Frank’s entire interview is here.

CHARGE: This bill was written by and for the largest banks.

FACT: My staff and I consulted with current and former regulators, lawmakers, and policy experts as the bill was crafted over the course of several years and were satisfied that it does not increase the risk of repeating the crisis of 2008. Since the majority of changes in this bill are designed to help the smallest financial institutions grow responsibly and be sources of strength in their communities, it is inaccurate to claim that big bank lobbyists wrote this bill. Representative Frank agreed that support for the bill is driven by banks with less than $10 billion in assets — such as community banks and credit unions.

CHARGE: This bill allows foreign banks to escape from all enhanced prudential regulation.

FACT: This bill does nothing — zip, zilch, nada — for large foreign banks.

CHARGE: This bill will help banks hide racial discrimination.

FACT: The exemption for small volume lenders from reporting on an expanded set of mortgage data points will provide substantial regulatory relief with very little loss of data. Based on current data collection rules, this provision would exclude just 3.57% of mortgage data from the new reporting requirements. Importantly, banks and credit unions would still be required to report on race and gender, and regulators would retain the ability to require enhanced mortgage data on a case by case basis from lenders who may be at risk of fair lending violations.

CHARGE: This bill ignores the concerns of everyday consumers.

FACT: This bill includes numerous new and enhanced consumer protections to help seniors, veterans, student borrowers, renters, and victims of fraud.

Bottom line: community banks and credit unions in Maine and nationwide have struggled to adapt to the heavy Dodd-Frank regulations designed for large global banks. These small institutions did not cause the financial crisis and they should not be punished for it. Both community banks and credit union executives and members in Maine have called this “much-needed legislation,” explaining that it will help free up capital that they can lend to small business owners, farmers, and folks looking for a mortgage. Since Maine’s lending landscape relies on our community banks and credit unions — all of which have been struggling under disproportionately costly and outdated regulations — I was glad to support a responsible, bipartisan measure to help them and Maine’s economy.

I expect the bill to pass the House of Representatives in its current form, but will not vote for it again if the House attaches unworkable or unreasonable provisions that would ease regulations on larger banks or hurt consumers.

I appreciate the opportunity to set the record straight on the bill, and to explain why I support the legislation in its current form. As always, I try to do my homework and reach conclusions on the facts; although skeptical at first, as I come to understand the actual terms of the bill, I realized that much of the rhetoric surrounding the debate was simply inaccurate and exaggerated. You can read further about the misconceptions and facts about the bill in this balanced article. I appreciate your being in touch on this and welcome follow-up questions or comments.

Note: I love Medium for its usefulness in sharing my positions with a wide audience; however, my website’s contact page, https://www.king.senate.gov/contact, remains the best way for me to receive and respond to questions and comments from my constituents in Maine.