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 served as the 45th president of the United States from 2017 to 2021. Trump graduated from the Wharton School of the University of P ...

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

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 Recess ...

after the

financial crisis of 2007–2008 Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline o ...

. 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) and "too big to jail" is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the great ...

. The bill also eliminated the

Volcker Rule The Volcker Rule iof 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 to restrict United States banks from ma ...

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 former American politician. He served as a member of the U.S. House of Representatives from Massachusetts from 1981 to 2013. A Democrat, Frank served as chairman of the House Financial Services Committe ...

said parts of the original

Dodd Frank act Dodd may refer to: Places * Dodd (Buttermere), a fell near Red Pike in England * Dodd (Lake District), a fell in Cumbria, England * Dodd, Indiana, a community in the United States People * Dodd (surname), people with the surname ''Dodd'' Other us ...

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

Some banking experts said that Silicon Valley Bank 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. 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 (sometimes called torture 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, ...

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 bank for the twelfth district in the United States. The twelfth district is made up of nine western states—Alaska, Arizona, California ...

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

References

{{Reflist

External links

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