UTICA, N.Y.--President Trump fulfilled his promise to "do a big number" on the Dodd-Frank Wall Street Reform and Consumer Protection Act Thursday evening.
He signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act, the first major rollback of the bank regulation laws put in place after the 2007-2008 financial crisis.
The Democratic-led Dodd-Frank was created with the goal of stopping banks from becoming "too big to fail." Banks larger than $50 billion dollars in capital were considered too critical to the U.S. financial system to fail without catastrophic results to the economy.
The new rollbacks change that threshold to banking institutions worth $250 billion dollars, considerably more money than before. The smaller banks are now no longer subject to stress tests.
Congresswoman Claudia Tenney contributed two pieces of legislation to the reform bill, including one that extends the time between bank accounting exams, and another that rolls back escrow regulations.
Tenney said her two bills "actually reduce some of the one-size-fits-all regulatory burden that Dodd-Frank put on our small community banks."
"Many of these banks are very small and their margins are low, especially if they're a credit union or a small bank, they don't have the kind of resources to comply with big federal regulators," Tenney said. "Small community banks and credit unions actually provide key lending to our small business community. If you're in trouble and you're a bank, the regulators are already on you for compliance issues."
The Republican incumbent said the importance of these rollbacks stem from bankers knowing their clients and their ability to pay back loans well.
"Being able to know your banker and they care about you, and they know your family, and they know that you're good for what your situation is," Tenney said. "But when a bank is prohibited from even working with their customers, that's when we have to allow more freedom at that level."
Tenney's opponent, Democrat Anthony Brindisi, said the rollbacks give too much freedom to banks close to meeting that $250 billion dollar-threshold.
"We need to make sure that we're tweaking Dodd-Frank, that we're easing regulations on small community banks and credit unions," Brindisi said. "But what this bill really does is, it takes 25 of the largest 38 banks in this country that hold one-sixth of all the assets and it scales backs regulations for them."
Brindisi fears the lack of Dodd-Frank regulations could spark another recession.
"What those regulations did is it helped protect against further financial collapse and put some protections in place so the big banks weren't taking too many risky bets with our hard-earned money."