Financial regulation relief law

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Recently, the President signed the first major financial services legislation since Dodd-Frank. The act received crucial bipartisan support in the Senate and passed the House on May 22nd to triumphant cheers from the banking industry.

It is not a major overhaul of Dodd-Frank, nor is it strictly a community bank law, as headlines alternatively suggest. In reality, it makes several meaningful technical changes − most notably by raising the threshold at which a bank is considered systemically important from $50 billion to $250 billion − while keeping the main pillars of post-crisis regulation intact. Mid-size banks will be the biggest winners as they will now be able to make plans for growth, including acquisitions, without considering added compliance costs. Smaller community and rural banks also will see plenty of benefits from this law, including relief from the Volcker rule and a number of mortgage and lending requirements.

The law is significant in terms of revisiting previously untouched post-crisis statutes, but it leaves a number of questions and actions for the Federal Reserve and other banking agencies. 

First take

A publication of PwC's financial services regulatory practice

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Julien Courbe

Financial Services Leader, PwC US

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