From the beginning, Dodd-Frank has drawn the criticism that instead of doing what it was supposed to and targeting banks that were too big to fail, instead it targeted thousands of community banks and credit unions and rendered them, in effect, too small to survive. It has been, according to banking advocates, a law that needed revision since it was first passed.
And that revision has come — as of last week, Congress voted to loosen the strictures of Dodd-Frank, particularly in regards to how it treated small and medium-sized banks. The bill increases the threshold from $50 billion in assets first to $100 billion, and then to $250 billion, before a bank is statutorily required to face higher regulatory scrutiny, stress tests and capital requirements. The legislation also offers some relief to large — but not massive — financial institutions like American Express, which will no longer be classified as “systemically important” and thus subject to stricter oversight.