¶ Tim Scott: Supporter of Deregulating the Financial Industry
Sen. Scott has repeatedly worked to help the financial industry. This includes cosponsoring a major deregulation bill that successfully weakened post-2008 financial crisis reforms and voting against Trump administration rules that allowed predatory lenders to avoid state interest rate caps and undermined federal rules that incentivized banks to better serve low-income communities.
¶ Sen. Scott Was An Original Cosponsor Of A Bill To Substantially Weaken Post-2008 Financial Crisis Reforms “Designed To Tame Wall Street, Protect Consumers And Make Our Financial System Less Fragile."
¶ Sen. Scott Was An Original Cosponsor Of S. 2155, The Economic Growth, Regulatory Relief, And Consumer Protection Act, A Bill To Weaken Dodd-Frank Financial Reforms “Designed To Tame Wall Street, Protect Consumers And Make Our Financial System Less Fragile."
In November 2017, Sen. Tim Scott Was An Original Cosponsor Of And Voted For S. 2155, The Economic Growth, Regulatory Relief, And Consumer Protection Act. [Congress.gov, accessed 01/10/23]
- Sen. Scott Voted For S. 2155. [U.S. Senate, 03/14/18]
- S. 2155 Became Law On May 24, 2018. [Congress.gov, accessed 03/09/23]
S. 2155 Sought To “Considerably Weaken” Dodd-Frank Financial Reforms “Designed To Tame Wall Street, Protect Consumers And Make Our Financial System Less Fragile." "The bill, S. 2155, would considerably weaken the Dodd-Frank Wall Street Reform and Consumer Protection Act, the law President Barack Obama signed in 2010, which was designed to tame Wall Street, protect consumers and make our financial system less fragile." [CNN, 03/05/18]
The Bill Raised The Threshold For A Bank To Be Considered Systematically Important From $50 Billion To $250 Billion In Assets. “The bill’s most controversial provision would increase the threshold from $50 billion to $250 billion for a bank to be considered systemically important. These so-called 'too big to fail' banks must undergo mandatory Fed ‘stress tests’ every year, complete a 'living will' directing how they could be wound down safely if they failed, and face other stricter safety rules. Just about everyone seems to agree that $50 billion was too low a threshold, inundating banks that don’t really pose systemic risks and don’t really need living wills with heavy compliance costs and headaches. But many experts believe $250 billion is too high.” [Politico, 11/08/18]
The Bill Also Weakened “Anti-Discrimination Standards In Housing By Raising The Number Of Loans A Bank Can Make Before It’s Required To Report On The Issue.” “[Former Congressman Barney Frank] criticized a provision in the bill that he said weakens anti-discrimination standards in housing by raising the number of loans a bank can make before it’s required to report on the issue. Another provision that he singled out allows foreign megabanks, such as Deutsche Bank and HSBC, to put their American assets into a separate holding company to avoid US regulatory scrutiny.” [Vox, 03/14/18]
¶ S. 2155 Was Praised By Industry Groups As a “Significant Breakthrough In Regulatory Relief For The Nation’s Community Banks” And The “First Major Bipartisan Bill To Bring About Much Needed Reforms To The Dodd-Frank Act And The Financial Regulatory Environment.”
The Independent Community Bankers Of America (ICBA) Praised Passage Of The Economic Growth, Regulatory Relief And Consumer Protection Act As Including “Common-Sense Improvements To The Nation's Financial Rules” And Representing A “Significant Breakthrough In Regulatory Relief For The Nation’s Community Banks.” “The Economic Growth, Regulatory Relief and Consumer Protection Act is a carefully crafted bipartisan bill, signed into law, that includes common-sense improvements to the nation's financial rules that allow community banks to better serve their customers and communities. It opens doors for more creditworthy borrowers and businesses, and it contributes to local economic growth and job creation nationwide. Supported by thousands of community bankers and based on years of dedicated attention by ICBA, S. 2155 represents a significant breakthrough in regulatory relief for the nation’s community banks.” [Independent Community Bankers Of America, accessed 01/10/23]
March 2018: The U.S. Chamber Of Commerce Sent A Letter To U.S. Senators Stating Their Support For The Economic Growth, Regulatory Relief And Consumer Protection Act And Warning It Would Be Considering Their Votes On The Legislation In Their Annual “How They Voted” Scorecard. “The U.S. Chamber of Commerce supports S. 2155, the ‘Economic Growth, Regulatory Relief, and Consumer Protection Act,’ which would better tailor regulations for community and regional banks. The Chamber will consider including votes on, or in relation to, this bill in our annual How They Voted scorecard. Main Street businesses depend on community and regional banks for the financing necessary to get started, sustain operations, manage cash, make payroll, and create well-paying jobs. The ‘one-size-fits-all’ approach to regulation implemented in the wake of the 2008 financial crisis has severely constrained these banks’ ability to serve consumers and small businesses in their communities.” [U.S. Chamber of Commerce, 03/06/18]
Consumer Bankers Association President Richard Hunt Praised The Economic Growth, Regulatory Relief And Consumer Protection Act As The “First Major Bipartisan Bill To Bring About Much Needed Reforms To The Dodd-Frank Act And The Financial Regulatory Environment”:
[Senate Banking Committee, accessed 01/10/23]
¶ Sen. Scott Voted Against Two Resolutions To Undo Trump Administration Rules Allowing Predatory Lenders To Avoid State Interest Rate Caps And Change Community Reinvestment Act Rules Cutting Incentives For Banks To Better Serve Low-Income Communities.
¶ May 2021: Sen. Scott Voted Against S.J. Res. 15., A Resolution To Repeal A Trump Administration Rule Allowing Predatory Lenders To Avoid State Interest Rate Caps And Charge “Triple-Digit” Rates In States With Caps Of 36% Or Less.
Sen. Scott Voted Against S.J. Res. 15, A Resolution To Repeal A Trump Administration Rule Allowing Lenders To Avoid State Interest Rate Caps Through “‘Rent-A-Bank’” Schemes. [U.S. Senate, accessed 05/11/21]
- S.J. Res. 15 Was The Resolution To Repeal The Trump Administration OCC's "'True Lender'" Rule, Which Enabled Lenders To Evade State Interest Caps Through "'Rent-A-Bank'" Schemes. "On June 24, the U.S. House of Representatives passed S.J. Res. 15 by a vote of 218-208 to repeal the Office of the Comptroller of the Currency’s (OCC) 'True Lender' rule under the Congressional Review Act (CRA). [...] Congress’ decision to overturn the rule stems from the criticism by consumer advocates and others that the rule would lead to allegedly unfair 'rent-a-bank' schemes, as well as predatory and usurious lending tactics." [JD Supra, 06/29/21]
Consumer Advocate Americans For Financial Reform Supported The Resolution, Stating, “‘Lenders Charging Triple-Digit Interest Rates Should Not Be Allowed To Trap Vulnerable People In Debt With Loans That Violate State Laws.’” “‘This bipartisan vote to roll back the OCC’s approval of rent-a-bank schemes reflects widespread support from voters for reigning in predatory lenders,’ said Linda Jun, senior policy counsel for Americans for Financial Reform. ‘The Senate has agreed that lenders charging triple-digit interest rates should not be allowed to trap vulnerable people in debt with loans that violate state laws. The House must now move swiftly to join the Senate and prevent any more rent-a-bank schemes from taking root in the 45 states that cap or otherwise regulate interest rates.’” [Americans for Financial Reform, 05/11/21]
Consumer Advocate The Center For Responsible Lending Found That The Trump Rent-A-Bank Rule “Allowed Predatory Lenders To Make Loans At 100% APR Or More In States With Limits Of 36% Or Less.” “According to the Center for Responsible Lending, this rule has allowed predatory lenders to make loans at 100% APR or more in states with limits of 36% or less by laundering loans through an out-of-state bank not subject to state limits.” [Sen. Chris Van Hollen, 06/30/21]
June 2021: President Biden Signed The Resolution Into Law, Repealing The Trump Administration’s Rent-A-Bank Rule. “Today, U.S. Senator Chris Van Hollen (D-Md.), a member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, and Committee Chairman Sherrod Brown (D-Ohio) applauded President Biden’s signing of their resolution into law to repeal the Trump Administration’s so-called True Lender Rule through the use of the Congressional Review Act. This regulation, finalized in the last months of the prior Administration, allows predatory lenders to skirt state laws meant to curb interest rates on loans and opens the door for these lenders to prey on vulnerable consumers.” [Sen. Chris Van Hollen, 06/30/21]
¶ Sen. Scott Voted Against H.J. Res. 90, A Resolution To Overturn The Trump Administration’s “Poorly Constructed” Rule To Change Community Reinvestment Act (CRA) Enforcement, Which Consumer Advocates Said Worked To “Reduce Incentives” For Banks To Lend To Low-Income Communities And Would Increase The Number Of Banks With “No Review” Of How They Serve Low-Income Communities.
Sen. Scott Voted Against H.J. Res. 90. [United States Senate, 10/19/20]
Dozens Of Consumer Advocacy Groups Supported H.J. Res. 90, A Resolution To Overturn The Trump Administration’s “Poorly Constructed” Rule To Change The Community Reinvestment Act (CRA), A Federal Law Encouraging Financial Institutions To Better Serve Low- And Moderate-Income Communities. “On behalf of the undersigned organizations, we are writing to urge you to cosponsor and support H.J.Res. 90, a disapproval resolution that would overturn a poorly constructed rule change on the Community Reinvestment Act (CRA) hastily finalized in May, days before Comptroller Otting’s resignation from the agency, and published this month.” [National Community Reinvestment Coalition, 06/23/20]
- The Community Reinvestment Act Requires Federal Banking Regulators To Encourage Financial Institutions To Meet The Credit Needs Of Low- And Moderate-Income Communities. “The Community Reinvestment Act (CRA), enacted in 1977, requires the Federal Reserve and other federal banking regulators to encourage financial institutions to help meet the credit needs of the communities in which they do business, including low- and moderate-income (LMI) neighborhoods.” [Board of Governors of the Federal Reserve System, accessed 03/09/23]
Consumer Advocates Found That The Trump Administration’s CRA Rule Would “Reduce Incentives For Banks To Lend To Low-And-Moderate Income(LMI) Families And Invest And Serve LMI Communities.” “The OCC’s final rule makes a series of changes to the CRA regulatory framework that reduce incentives for banks to lend to low-and-moderate income(LMI) families and invest and serve LMI communities: home buyers and homeowners, small businesses, community development projects that primarily benefit and serve LMI people.” [National Community Reinvestment Coalition, 06/23/20]
Consumer Advocates Also Noted That The Trump Administration’s CRA Rule “Expands The Number Of Banks That Will Have No Review” Of How They Serve LMI Communities. “It also expands the number of banks that will have no review of how they open and close bank branches and provide key bank services in LMI and underserved neighborhoods.” [National Community Reinvestment Coalition, 06/23/20]