Senate Banking Committee Holds Economic Growth Hearing

On Thursday, May 15, 2017, the Senate Banking, Housing, and Urban Development Committee held a hearing entitled: “Fostering Economic Growth: Midsized, Regional, and Large Institution Perspective.”  The second in a series, the hearing addressed how to foster economic growth through banking reform.  In his opening statements, Senate Banking Committee Chairman Mike Crapo (R-ID) stated the $10 billion threshold on banks needs to be raised in order to relieve compliance costs on midsized and regional banks.  Ranking Member Sherrod Brown (D-OH) emphasized the necessity of bi-partisan reform in his opening statements.  He also shared his fear that some law makers have forgotten the severity of the last financial crisis.

 

The Hearing featured testimonies from:

 

  • Mr. Harris Simmons, CEO and Chairman, Zions Bancorporation, speaking on behalf of the Regional Bank Coalition;
  • Mr. Greg Baer, President, The Clearing House Association;
  • Mr. Robert Hill, CEO, South State Corporation, speaking on behalf of the Midsize Bank Coalition of America; and
  • Ms. Saule Omarova, Professor of Law, Cornell University Law School.

 

In their testimonies, most witnesses focused on outlining how Dodd Frank regulations have impacted banks and why they should be reduced.  They stated regulations limit banks’ abilities to lend, and force banks to increase rates or close branches in order to afford compliance costs.  Ms. Omarova expressed skepticism stating banks benefit from fewer regulations, and there is no proof regulations prevent them from lending.

 

Some Senators questioned witnesses on how post-Dodd Frank banking regulations have impacted customers and caused rates to increase.  Creating regulations based on the risk banks pose to the U.S. economy, rather than thresholds based on bank assets was also discussed.   Republican Senators were concerned with relieving regulations in order to promote economic growth, while Democratic Senators worried relieving regulations would leave the economy vulnerable, and might lead to another financial crisis.