By The Financial District
Well-Oiled Lobbyists Watered Down U.S. Banking Rules
It seemed like a good idea at the time: Red-state Democrats facing reelection would join forces with Republicans to slash bank regulations — showing willingness to work with President Donald Trump while bucking many in their party.
Photo Insert: The rollback was leveraged with lobbying that cost millions of dollars and drew an army of hundreds of lobbyists.
That unlikely coalition voted in 2018 to roll back portions of a far-reaching 2010 law intended to prevent a future financial crisis.
But those changes are now being blamed for contributing to the recent collapse of Silicon Valley Bank and Signature Bank that prompted a federal rescue and has stoked anxiety about a banking contagion, Brian Slodysko and Ken Sweet reported for the Associated Press (AP).
The rollback was leveraged with lobbying that cost millions of dollars and drew an army of hundreds of lobbyists. The episode offers a reminder of the power that bankers wield in Washington, where the industry spends prodigiously to fight regulation.
“The bottom line is that these banks would have faced a tougher supervisory framework under the original ... law, but Congress and the Trump regulators took an ax to it,” said Carter Dougherty, a spokesman for Americans for Financial Reform, a left-leaning financial sector watchdog group.
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