Democratic Infighting Over 2018 Banking Reform Act Raising Concerns

Democratic leaders are caught in the middle of a contentious debate over a 2018 bipartisan bill aimed at rolling back part of the landmark Dodd-Frank Wall Street Reform Act. The bill, which passed in 2018, gave the Federal Reserve more discretion over how to regulate midsize banks, a move that has been criticized by progressive Democrats who argue it weakened regulations on banks. Sen. Elizabeth Warren (D-Mass.) is pushing for a vote on legislation to reverse the 2018 law, but Sen. Majority Leader Chuck Schumer (D-N.Y.) has hinted that he only wants to bring bipartisan legislation to the floor that has a chance of passing. Several Democrats who voted for the 2018 bill are now facing reelection, including Sens. Joe Manchin (D-W.Va.) and Tim Kaine (D-Va.).

Key Takeaways:

• The 2018 Economic Growth, Regulatory Relief and Consumer Protection Act gave the Federal Reserve more discretion over how to regulate midsize banks, a move that has been criticized by progressive Democrats.
• Sen. Elizabeth Warren (D-Mass.) is pushing for a vote on legislation to reverse the 2018 law, but Sen. Majority Leader Chuck Schumer (D-N.Y.) has hinted that he only wants to bring bipartisan legislation to the floor that has a chance of passing.
• Several Democrats who voted for the 2018 bill are now facing reelection, including Sens. Joe Manchin (D-W.Va.) and Tim Kaine (D-Va.).
• Sen. Manchin has said that he wants to put the cost of insuring deposits above $250,000 on depositors above the limit, not those with less than $250,000 in deposits at a bank.
• Sen. Debbie Stabenow (D-Mich.) has defended her vote for the 2018 bill, stating that it contained provisions important for small banks and argued that other factors were responsible for the collapse of Silicon Valley Bank and Signature Bank.
• Democrats who aren't thrilled about wading into an intraparty fight over the 2018 weakening of Dodd-Frank rules are looking at alternative proposals, such as raising the $250,000 FDIC insurance limit or requiring a Senate-confirmed inspector general to oversee the Federal Reserve system.

Statistics:

• 13 Democrats voted to amend the 2010 Dodd-Frank Wall Street Reform Act to give the Federal Reserve more discretion to regulate midsize banks, including Sens. Joe Manchin, Tim Kaine, and Kyrsten Sinema.
• 18 Senate Democratic co-sponsors support Warren's proposal to reverse the 2018 rollback of Dodd-Frank.
• The 2018 Economic Growth, Regulatory Relief and Consumer Protection Act raised the threshold for bank regulation from $50 billion to $250 billion.
• The Federal Deposit Insurance Corp. (FDIC) insures deposits up to $250,000.

Sources:

• "Democrats clash over banking bill rollback" by Alexander Bolton, The Hill
• "Warren, Manchin, and Tester's Bill Would Let Banks Lend More" by Naomi Jagoda, Roll Call
• "Dodd-Frank bill revised in Senate, but differences remain" by Jacob Pramuk, CNBC
• "Warren proposes rollback of Trump-era banking deregulation" by Alexander Bolton, The Hill
• "Democrats clash over banking bill rollback" by Alexander Bolton, The Hill