Key facts
- The U.S. House of Representatives passed the Main Street Capital Access Act (H.R. 6955) by a vote of 270-154.
- The bill aims to ease capital, supervisory, and merger requirements for community banks and smaller financial institutions.
- It provides new banks three years to meet capital requirements and reduces leverage ratios for rural community banks.
- Opponents, including consumer advocacy groups and Senator Elizabeth Warren, argue the bill increases systemic risk and benefits large banks.
- The legislation now proceeds to the Senate for consideration.
The U.S. House of Representatives has passed the Main Street Capital Access Act, a bill aimed at easing federal banking regulations for smaller financial institutions. The legislation, sponsored by House Committee on Financial Services Chairman French Hill and Subcommittee on Financial Institutions Chairman Andy Barr, passed largely along party lines with a vote of 270-154. The bill seeks to modify regulations concerning bank formation, supervision, and mergers, including providing new banks with three years to meet capital requirements and reducing leverage ratios for rural community banks.
Proponents argue the bill will spur the formation of new banks, tailor regulations to smaller institutions, and remove barriers to local lending. They believe it will promote economic growth and strengthen Main Street. Industry executives suggest that potential changes to capital requirements could encourage large banks to re-enter or expand their presence in the mortgage market, though they anticipate a cautious approach.
However, the bill faces significant opposition. A coalition of 28 consumer advocacy groups, including the National Community Reinvestment Coalition and the National Consumer Law Center, sent a letter to the House calling the bill a 'dangerous deregulatory package.' They contend that the regulations are essential safeguards against systemic risk and predatory practices. Senator Elizabeth Warren also criticized the bill, labeling it a 'massive giveaway to Wall Street' that could relax supervision of big banks, fast-track mergers, and increase the likelihood of bank failures. The bill now moves to the Senate for further consideration.