"Over the past 14 years, banking has experienced significant events and changes and has regularly
been the subject of policymaker initiatives and debates. In response to the 2007-2009 financial
crisis, Congress—primarily through the 2010 Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act; P.L. 111-203)—and bank regulators, using new and existing
authorities, increased bank regulation. While some observers view those changes as necessary
and effective, others argued that certain regulations were unjustifiably burdensome. To address
those concerns, the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act
(P.L. 115-174) relaxed certain regulations. Opponents of that legislation argue that it
unnecessarily pared back important safeguards, while proponents of deregulation argue that
additional measures are needed. More recently, the Coronavirus Disease 2019 (COVID-19) pandemic has created
unprecedented economic conditions that could stress the banking industry. As a result, the 117th Congress faces many issues
related to banking, including:
Safety and soundness.
Banks are subject to prudential regulations designed to reduce the likelihood of
bank failures, and banks face certain rules about how they should value their assets and account for losses.
In addition, anti-money-laundering requirements aim to block transactions involving criminal proceeds.
Banks are also required to take steps to avoid cyberattacks. The extent to which these regulations are
effective and appropriately balance benefits and costs is a matter of debate.
Consumer fairness and access.
Certain laws are designed to protect consumers and ensure that lenders use
fair lending practices. Generally, policymakers balance consumer protection, credit access, and industry
costs when considering consumer protection laws and regulation and encourage access to banking services
for disadvantaged consumers. In addition, one bank regulator has revised its Community Reinvestment Act
(CRA, P.L. 95-182) regulatory framework while the other two regulators have not, raising concern that the
CRA could be implemented inconsistently.
COVID-19 effects and policy responses.
The COVID-19 pandemic has impaired the ability of millions of
businesses and individuals to make repayments on their bank loans. Furthermore, the Coronavirus Aid,
Relief, and Economic Security (CARES) Act (P.L. 116-136) will have direct or indirect effects on banks.
Congress may examine questions related to stress in the banking industry, the expiration of loan
forbearances and of bank regulatory relief granted pursuant to the CARES Act, and the regulatory
implications of bank asset growth caused by the pandemic and policy responses to it.
Community banks.
The number of small or “community” banks has declined substantially in recent
decades. No consensus exists on the degree to which the removal of regulatory barriers to interstate
branching and banking, market forces, and regulatory burden are causing the decline. Because these
institutions are considered important sources of credit, Congress may consider policies to support them.
..."
Banking
