Senate Banking Could Take Second Look at Dodd-Frank
After passing the Dodd-Frank Act two years ago, the Senate Banking Committee has largely fallen silent, holding hearings on a spate of issues but otherwise pushing only noncontroversial bills forward.
But that is likely to change next year, including—some industry representatives hope—the possibility that the panel will take a fresh look at several financial reform law provisions that bankers see as too burdensome.
"We're in a strange phase after the Wall Street reform act where a lot of the activity was in the regulatory arena. In other words, the timeframe was for the bank regulatory agencies to implement and flesh out the massive changes that Congress put into statute," said Paul Merski, executive vice president for congressional relations and chief economist for the Independent Community Bankers of America. "We're kind of getting in the phase where Congress will have a second review of how these provisions that regulations have fleshed out are impacting the marketplace, and maybe make corrections where things are not working out."
The committee has yet to issue a formal agenda for the next Congress, but spokesman Sean Oblack said that oversight of the Dodd-Frank law and other issues like mortgage finance reform will probably top the agenda, much like last year.
"We expect that the committee would continue to focus on oversight of Wall Street Reform, the housing finance system, expiring authorizations and consideration of the President's nominees in the 113th Congress," Oblack said in a statement to American Banker. "That said, Chairman Johnson is waiting until the committee is officially organized so he has a chance to consult with the new roster of committee members and the ranking member before releasing a detailed agenda." (AB is a sister publication to National Mortgage News.)
Observers said there are several reasons why legislation—not just oversight—might be back on the agenda next year.
For one, although Democrats were mostly united in defending the Dodd-Frank law leading up to the election, they may be feeling more latitude now to address certain issues with the bill.
"The was a certain blood oath that Democrats took leading up to the election, where they all had to take a pledge to say that Dodd-Frank was the best thing going, but in truth they all knew that it needed drastic improvements," said Cornelius Hurley, director of the Morin Center for Banking and Financial Law at Boston University. "So without the looming elections, they can now set about making those drastic improvements."