By Pete Schroeder
WASHINGTON (Reuters) – Democratic Senator Elizabeth Warren promised to fight a U.S. Senate bill easing bank rules introduced following the 2007-2009 global financial crisis as the chamber moved on Tuesday to begin debating the draft bipartisan legislation.
Warren, long a consumer advocate, warned customer protections would be eroded as the Senate moved closer to passing the first rewrite of the 2010 Dodd-Frank financial reform law.
The Senate voted on Tuesday morning 67-32 in favor of debating the bill, paving the way for the chamber to potentially pass the proposed legislation by the end of the week.
Moderate Democrats who support the legislation rejected Warren’s claims, saying on Tuesday it offered critical relief for small and mid-sized lenders and that they expected it to quickly pass the senate.
Despite her sway among liberal Democrats, Warren’s efforts are unlikely to derail the bill, according to analysts, who put the chances of it becoming law at around 90 percent on Monday.
“People in this building may forget the devastating impact of the financial crisis 10 years ago, but the American people have not forgotten,” Warren told reporters on Tuesday.
The bill, authored by Senate Banking Committee chairman Mike Crapo, has the support of 13 moderate Democrats, which, given broad Republican backing, should be enough to assure passage in the 100-seat chamber.
Several senior Democratic senators, including Warren and Sherrod Brown, have come out against it.
Speaking to reporters on Tuesday, Senate Democrats who helped write the bill dismissed criticism that it helps large banks, saying it would free up small community banks and credit unions to lend more to small businesses.
“If we’re going to continue to have access to capital in rural areas of our country, this bill needs to pass,” said Senator Jon Tester, adding the increased risk to consumers and the financial system was “very, very, very minimal.”
Republican critics say Dodd-Frank went too far and curbs banks’ ability to lend, while many Democrats say it provides critical protections for consumers and taxpayers.
Republicans have tried for years to revise the law but only recently have some Democrats begun to support tweaks.
Crapo’s bill would ease the capital and operational burden on smaller lenders, but also includes a number of provisions beneficial to all but the largest U.S. banks.
Most notably, the bill would raise the threshold at which banks are considered systemically risky and subject to stricter oversight to $250 billion from $50 billion.
It also exempts banks with less than $10 billion in assets from rules banning proprietary trading.
Democrats said they are considering a number of modest changes to include provisions sought by House of Representative lawmakers who still need to pass the bill for it become law.
Tester, however, said Senate Democrats would abandon the bill if House lawmakers add more radical de-regulatory language.
Crapo is expected to release an amended version of the Senate bill this week.
Senator Heidi Heitkamp, another key backer of the bill, said she expects leaders in the House, as well as the White House, will safeguard the bill so it can make its way to President Donald Trump’s desk for signing into law in coming months.
(Reporting by Pete Schroeder; Additional reporting by Rick Cowan; Writing by Michelle Price; Editing by Frances Kerry and James Dalgleish)