The Economic Growth, Regulatory Relief, and Consumer Protection Act (abbreviated EGRRCPA; , ) was signed into law by President

Donald Trump Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who is the 47th president of the United States. A member of the Republican Party (United States), Republican Party, he served as the 45 ...

on May 24, 2018. The bill eased financial regulations imposed by the

Dodd–Frank Wall Street Reform and Consumer Protection Act The Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd–Frank, is a United States federal law that was enacted on July 21, 2010. The law overhauled financial regulation in the aftermath of the Great Reces ...

after the

2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...

. Specifically, the bill raised the threshold from $50 billion to $250 billion under which banks are deemed

too big to fail "Too big to fail" (TBTF) is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected with an economy that their failure would be disastrous to the greater e ...

. For the vast majority of banks, the bill cut back on requirements for reporting of mortgage loan data. The bill also eliminated the

Volcker Rule The Volcker Rule is sectioof the Dodd–Frank Wall Street Reform and Consumer Protection Act (). The rule was originally proposed by American economist and former United States Federal Reserve Chairman Paul Volcker in 2010 to restrict United S ...

for small banks with less than $10 billion in assets. The Act was the most significant change to U.S. banking regulations since Dodd–Frank.

Barney Frank Barnett Frank (born March 31, 1940) is a retired American politician. He served as a member of the U.S. House of Representatives from Massachusetts from 1981 to 2013. A Democratic Party (United States), Democrat, Frank served as chairman of th ...

, leading co-sponsor of Dodd-Frank, said parts of the original law were a mistake and supported the legislation.

Legislative history

In the House, the bill passed by a 258-159 vote with support from all but one Republican (the exception being Walter B. Jones Jr.) and 33 out of 193 Democrats. In the Senate, the bill passed by a 67-31 vote with support from all Republicans and 17 out of 47 Democrats. Within the Democratic caucuses, progressives strongly opposed the bill.

Aftermath

In the wake of the 2023 banking crisis, some banking experts said that

Silicon Valley Bank Silicon Valley Bank (SVB) is a commercial bank division of First Citizens BancShares. The bank was previously the primary subsidiary of SVB Financial Group, a Public company, publicly traded bank holding company that had offices in 15 U.S. state ...

and Signature Bank would have managed its risks better had Dodd-Frank "not been rolled back under President Trump," however other experts have disputed this assertion as Silicon Valley Bank was still required to undergo periodic stress testing under the Act. A lengthy report done by

Michael S. Barr Michael Solomon Barr (born October 6, 1965) is an American legal scholar who has been serving as governor of the Federal Reserve since 2022. Barr served as second Vice Chair for Supervision of the Federal Reserve from 2022 until 2025. From 2009 t ...

of the

Federal Reserve Board of Governors The Board of Governors of the Federal Reserve System, commonly known as the Federal Reserve Board, is the main governing body of the Federal Reserve System. It is charged with overseeing the Federal Reserve Banks and with helping implement the mo ...

, stated that Silicon Valley Bank (SVB) had failed due to a "textbook case of mismanagement" and that top leaders at the bank "failed to manage basic interest rate and liquidity risks". Barr also found that the Federal Reserve Supervisors had failed to take action against SVB and that even SVB's own board of directors failed to watch over leadership and that SVB's standards were "too low" demonstrating the weaknesses in regulation and lack of supervision, which was exaggerated by the loosening of the

. In his analysis Barr said that the SVB Board response to the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) led to a "less assertive supervisory approach", as well as reducing standards and increasing complexity, which left SVB with many vulnerabilities. Other factors were the combination of social media posts of concern about a bank run, as depositors quickly started withdrawing funds, speeding up the bank run and causing this to ripple to other banks. SVB’s CEO Greg Becker supported the rollback and explicitly lobbied for its passage, due to the reduced frequency and number of scenarios required for

stress testing Stress testing is a form of deliberately intense or thorough testing, used to determine the stability of a given system, critical infrastructure or entity. It involves testing beyond normal operational capacity, often to a breaking point, in orde ...

implemented under the

for banks with under $250 billion in assets. The

Federal Reserve Bank of San Francisco The Federal Reserve Bank of San Francisco (informally referred to as the San Francisco Fed) is the Federal Reserve, federal bank for the twelfth district in the United States. The twelfth district is made up of nine western U.S. state, states— ...

did have discretion to annually examine any bank with $100 billion in assets.

References

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External links

Economic Growth, Regulatory Relief, and Consumer Protection Act
as amended
PDFdetails
in the GPObr>Statute Compilations collection
2018 in economic history Acts of the 115th United States Congress Consumer protection legislation First presidency of Donald Trump Systemic risk United States federal banking legislation