Senate Banking Committee Chairman Tim Scott Promises a Comprehensive Bank Legislative Package
Senate Banking Committee Chairman Sen. Tim Scott, R-S.C., revealed his plans to craft a comprehensive bank legislative package. The proposed package aims to address the concerns of community banks about their competitiveness in the mortgage lending market and other significant issues. This information was shared during a recent interaction with the press. The news comes on the heels of the bipartisan housing package that Scott and Sen. Elizabeth Warren, D-Mass., the panel’s ranking member, unveiled.
The Bipartisan Housing Package: Key Details
The bipartisan housing package includes several White House priorities, such as a prohibition on institutional investors buying single-family homes. However, the bill did not incorporate community bank-favored riders like brokered and custodial deposit bills, which were part of the House version of the housing package. The latter was led by House Financial Services Committee Chairman Rep. French Hill, R-Ark.
The House’s version of the bill also comprised riders that would encourage the formation of de-novo banks and ease supervisory oversight for banks with less than $6 billion in assets. Following the passage of the House bill, Warren hinted at the possible opposition the community bank provisions might face from Senate Democrats.
In a statement, Warren emphasized that “House Republicans should not hold housing relief hostage to push forward several bank deregulatory bills that will make our community banks more fragile while harming consumers, small businesses, and economic growth. Americans need relief from the housing crisis now.”
Senate’s Perspective on the Housing Package
The Senate voted 84-6 to consider the housing package, which will primarily be the Scott-Warren version of the legislation. Scott stated that the community bank provisions were not the central focus of this housing bill. However, he expressed his intent to release a broader bank legislative package that would include measures to enhance banks’ involvement in mortgage lending, particularly for community banks.
Scott highlighted the difference between the two bills by stating, “We’re going to have a financial institutions package that addresses a lot of the issues around financing, whereas this is a home package, which is really focusing on how we spur more access on the local level, as much as it does anything else. We’ll get to the other part of financial institutions here shortly.”
Upcoming Financial Institutions Legislation
While Scott did not provide specific details about when the new financial institutions legislation would be introduced, he mentioned upcoming meetings with Rep. French Hill and the administration. Over the past year, Congress has considered a number of bills aimed at providing regulatory relief to the banking industry, especially community banks.
The Senate Banking Committee has held hearings on bipartisan legislation to reform deposit insurance, which would raise the deposit insurance limit to $10 million for certain business accounts. The House Financial Services Committee, under Hill’s leadership, has passed a number of bank-specific bills with broad bipartisan support, and many others have been discussed in committee hearings. The focus is on de novo banks and proposed changes to the Federal Deposit Insurance Corp.’s least-cost resolution framework.
With the upcoming midterm elections and the potential change in House control, any legislative package that aims to become a law will require extensive bipartisan support. As such, the banking community eagerly awaits the details of the proposed financial institutions legislation.
Source: American Banker
