WASHINGTON (AP) — Republican senators advanced legislation Thursday that would ease rules on smaller banks and other requirements of the landmark law reining in Wall Street and the financial industry after the 2008 crisis.
But it received no support from Democrats, making its chances of Senate passage slim.
The 12-10 party-line vote came in a sometimes rancorous session of the Senate Banking Committee. Sen. Richard Shelby of Alabama, the committee's Republican chairman, authored the legislation that would bring a sweeping rewrite of the 2010 law that arose from the financial crisis and the ensuing Great Recession. That law, known as Dodd-Frank, was enacted despite Republican opposition by a Congress controlled by Democrats.
The law tightened government oversight of banks and financial markets in an effort to avert another crisis and another taxpayer bailout of banks. At the height of the meltdown in late 2008, the government stepped in to rescue crippled banks — including the largest Wall Street institutions — with hundreds of billions of dollars in taxpayer money.
Now tables have been turned by last November's elections, which gave the Republicans control of the Senate in addition to their House majority. Republicans have made a softening of the Dodd-Frank law a key priority.
The Republican legislation that cleared the panel would lift the threshold from $50 billion in assets to $500 billion for banks subject to tighter oversight by regulators and stricter requirements for holding capital buffers against risk. It also would ease mortgage lending standards for banks and financial firms on condition they reduce risks.
In addition, the proposal would give lawmakers expanded oversight powers over the Federal Reserve, a longtime target of conservative Republicans.
Shelby said the measure was intended, among other things, "to ease unnecessary regulatory burdens on the nation's community banks and credit unions."
But panel member Sen. Elizabeth Warren, the liberal Democrat from Massachusetts who is the party's strongest critic of Wall Street, insisted, "The last thing we should be doing is rolling back the rules and weakening the oversight of some of the biggest banks in this country." She said Shelby's bill "is good for giant banks, but it's bad for families and dangerous for the economy."
Other Democrats expressed anger at what they said was heavy-handed railroading of the legislation by the Republican majority in a committee that customarily had worked in a bipartisan fashion.
"I'm a pretty disappointed senator this morning," said Sen. Mark Warner, D-Va.
Given the partisan divide, Shelby left open the possibility of the two sides working to shape a compromise on the measure. There are areas of agreement that can be built upon, he said. "I view this as just one step in a very long process," Shelby said. "I do not in any way see this as the end of the road."
The 2010 Dodd-Frank law is named after the former lawmakers who were its principal authors, then-Sen. Christopher Dodd, D-Conn., and then-Rep. Barney Frank, D-Mass.