Amendment Allows Small Banks to Choose Their Regulator
Earlier today, the Senate also approved — by an overwhelming 90 to 9 margin — a bipartisan amendment allowing the Federal Reserve to continue to supervise state-chartered banks and banks with less than $50 billion in assets. Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill initially transferred supervisory authority to the Federal Deposit Insurance Corporation.
Dodd was one of nine senators — eight Democrats plus Sen. Bernie Sanders (I-Vt.), who caucuses with the Democrats — who opposed the amendment on the grounds that it produced regulatory overlaps and introduced the opportunity for regulatory arbitrage. State-chartered and small banks under the new language can choose whether to be overseen by the Fed or the FDIC.