Senate Regulatory Relief Proposal: Banking Committee Chairman Releases Discussion Draft of “The Financial Regulatory Improvement Act of 2015”Sullivan & Cromwell LLP - May 13, 2015
Yesterday afternoon, Senate Banking Committee Chairman Richard Shelby (R-AL) released a discussion draft of “The Financial Regulatory Improvement Act of 2015” (the “Discussion Draft”). This proposed legislation would significantly amend certain aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), in particular the current regulatory framework for designating and regulating so-called systemically-important financial institutions, or “SIFIs.” In addition, the 216-page Discussion Draft would substantially broaden the Dodd-Frank safe harbor for “qualified mortgages” and includes a number of other notable provisions relating to the regulation of insurance companies, the structure and operation of the Federal Reserve System, and housing finance, among other matters.
In a statement accompanying the release of the Discussion Draft, Chairman Shelby described it as a “working document intended to initiate a conversation with all members of the Committee who are interested in reaching a bipartisan agreement to improve access to credit and to reduce the level of risk in [the] financial system.” The Committee’s Ranking Minority Member, Sen. Sherrod Brown (D-OH), issued a statement maintaining that, “[r]ather than focusing on issues that enjoy bipartisan support,” the Discussion Draft is a “sprawling industry wish list of Dodd-Frank rollbacks,” but he pledged to “work with Republicans . . . to provide small financial institutions the help they need without undermining important financial safeguards.” Similarly, the Treasury Department commented that the Discussion Draft “appears to roll back and undermine significant portions of Wall Street reform,” but stated that Treasury “stand[s] ready to work with the Committee on targeted efforts that would strengthen reforms, building on the tiered and tailored regulatory framework established by [Dodd-Frank].” The Committee is scheduled to hold a mark-up of the legislation on May 21, 2015.