Economic Growth, Regulatory Relief, and Consumer Protection Act
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| Economic Growth, Regulatory Relief, and Consumer Protection Act | |
|---|---|
 U.S. Government · Public domain · source | |
| Name | Economic Growth, Regulatory Relief, and Consumer Protection Act |
| Short title | EGRRCPA |
| Citation | Pub.L. 115–174 |
| Enacted by | 115th United States Congress |
| Signed by | Donald Trump |
| Date signed | 2018-05-24 |
| Public law | 115–174 |
| Also known as | Senate Bill 2155 |
Economic Growth, Regulatory Relief, and Consumer Protection Act is a 2018 United States statute that amended provisions of the Dodd–Frank Wall Street Reform and Consumer Protection Act and modified banking regulations implemented after the financial crisis of 2007–2008. The law attracted attention from legislators including Mitch McConnell, Charles Schumer, Sherrod Brown, and Elizabeth Warren, and engaged regulatory agencies such as the Federal Reserve, Federal Deposit Insurance Corporation, and Consumer Financial Protection Bureau while intersecting with policy debates involving the Trump administration, Barack Obama administration, and financial industry groups like the American Bankers Association and Independent Community Bankers of America.
Background and Legislative History
The legislative genesis drew on prior measures and reports from the Financial Crisis Inquiry Commission, Congressional Research Service, and hearings in the House Financial Services Committee and Senate Banking Committee where leaders including Jeb Hensarling, Maxine Waters, Mike Crapo, and Sherrod Brown debated amendments to the Dodd–Frank Act, Glass–Steagall discussions, Volcker Rule interpretations, and capital and liquidity rules advanced by the Basel Committee on Banking Supervision and the Federal Deposit Insurance Corporation. Supporters referenced experiences from the 2007–2008 financial crisis, Lehman Brothers collapse, Bear Stearns rescue, and Troubled Asset Relief Program as context for deregulatory intent, while opponents cited reports from the Federal Reserve Board, Office of the Comptroller of the Currency, Government Accountability Office, and Congressional Budget Office warning about systemic risk, regulatory arbitrage, shadow banking, and consumer protection gaps. Passage in the 115th Congress involved negotiations among Senate Republicans including Mitch McConnell, Senate Democrats including Chuck Schumer, and interest from state attorneys general, municipal regulators in New York and California, and advocacy groups led by Public Citizen, AFL–CIO, and Americans for Financial Reform.
Provisions and Key Changes
Major statutory changes included adjustments to the enhanced prudential standards threshold, alterations to tailoring rules for systemically important financial institutions, and revisions to the CFPB’s supervisory and exam authorities. The law raised the asset-size threshold from $50 billion to $250 billion for enhanced prudential standards applied by the Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency, affecting institutions such as JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs, Morgan Stanley, and regional banks like Fifth Third Bank and PNC Financial Services. It modified the Durbin Amendment implementation for debit interchange fees, amended mortgage lending requirements under the Truth in Lending Act and Real Estate Settlement Procedures Act that involved Fannie Mae and Freddie Mac, and created small‑bank exemptions influencing community banks, credit unions, and minority depository institutions represented by groups including the National Credit Union Administration and Native American Bank. The statute also clarified the CFPB director’s funding mechanism, strengthened small‑dollar lending protections, and introduced changes to stress testing, living wills requirements overseen by the Federal Reserve and Securities and Exchange Commission, and the Consumer Financial Protection Bureau’s supervision standards.
Impact on Financial Institutions and Consumers
The redefinition of regulatory thresholds affected large global bank holding companies, regional banking organizations, and community banks including SunTrust, BB&T (now Truist), and Zions Bancorporation, altering compliance costs and capital planning interactions with the Federal Reserve, FDIC, and OCC. Proponents argued relief would promote lending to small businesses, homeowners, and agricultural borrowers in regions covered by the Small Business Administration and Department of Agriculture loan programs, while critics warned of increased systemic risk reminiscent of vulnerabilities exposed by the failure of Washington Mutual, IndyMac, and the Savings and Loan crisis. Consumer advocates such as Consumers Union, Center for Responsible Lending, and National Consumer Law Center expressed concern about weakened protections under the CFPB, mortgage servicing standards affecting the Mortgage Bankers Association and National Association of Realtors, and potential disparities impacting underserved communities tracked by the Department of Justice and Department of Housing and Urban Development.
Implementation and Regulatory Guidance
Regulatory agencies issued guidance and rulemaking to implement statutory changes: the Federal Reserve adjusted stress test schedules and capital planning rules, the FDIC updated deposit insurance assessment frameworks, the OCC revised supervisory manuals, and the CFPB issued advisory opinions and supervisory guidance on small‑bank exemptions and fair lending enforcement. Interactions with international standards involved the Basel Committee, Financial Stability Board, and European Banking Authority, while domestic coordination included the Council of Economic Advisers, Treasury Department reports, and state banking regulators such as the Conference of State Bank Supervisors. Implementation required updates to reporting forms like Call Reports and coordination with clearinghouses including the Depository Trust & Clearing Corporation and payment networks like Visa and Mastercard responding to the Durbin-related provisions.
Congressional and Public Response
Congressional reactions split along party lines with Republican leaders praising the measure as relief for community banks and Democrats warning about rollbacks to post‑crisis safeguards; floor debates involved Senators Orrin Hatch, Amy Klobuchar, and Bill Nelson and Representatives including Jeb Hensarling and Maxine Waters. Public commentary included analyses from think tanks such as the Brookings Institution, Heritage Foundation, Cato Institute, and Urban Institute, coverage in The Wall Street Journal, The New York Times, Financial Times, Bloomberg, and CNN, and statements from industry coalitions like the U.S. Chamber of Commerce and progressive coalitions including MoveOn and National People’s Action. State regulators, municipal authorities in New York and California, and consumer litigation groups continued scrutiny and oversight petitions to federal agencies.
Legal Challenges and Litigation
Litigation addressed the law’s interplay with CFPB funding, separation of powers disputes, and preemption issues involving state consumer protection statutes; parties included state attorneys general, Public Citizen, and industry plaintiffs. Cases cited precedents such as District of Columbia v. Heller for constitutional argumentation in other contexts and banking decisions including Cuomo v. Clearing House and National Collegiate Athletic Association litigation for administrative law and preemption principles, with challenges heard in federal district courts, U.S. Courts of Appeals, and potential Supreme Court review petitions. Ongoing suits examined supervisory discretion exercised by the Federal Reserve, FDIC enforcement actions, and private rights of action under amended provisions related to mortgage servicing and unfair or deceptive acts or practices pursued by the Consumer Financial Protection Bureau and state regulators.