(Reuters) - Senator Richard Shelby attached his financial regulation relief bill to an appropriations markup on Wednesday, which passed a subcommittee vote, acting on a threat he issued previously if Democrats failed to offer a fair compromise.
The Financial Regulatory Improvement Act of 2015, which aims to ease bank regulations and enforce greater transparency on the Federal Reserve and other financial regulators, passed the Senate Banking Committee in May with no support from Democrats.
During the bill’s drafting, Shelby said he could move the proposal through the Senate’s appropriations arm if Democrats were not willing to hash out support. Shelby acted on that threat on Wednesday.
The bill, however, is unlikely to win the support from Democrats needed to bring it to a floor vote in the Senate.
The biggest beneficiaries of the bill would be small US lenders subject to greater regulation under the Dodd-Frank reform act. Large regional banks such as PNC Financial Services Group with assets between US$50bn to US$500bn would also benefit, as they may no longer be subject to stricter Fed regulations if the proposal is signed into law. The bill also proposes significant changes to the Federal Reserve system.
With Democratic support yet to surface, President Barack Obama is highly unlikely to sign the bill should it ever get to the Senate floor for a vote.
On Wednesday, Shelby attached his bill to a Senate Appropriations Subcommittee mark-up of the Financial Services and General Government Appropriations Act for Fiscal Year 2016, which won approval.
Shelby’s appropriations tactic could give the financial regulation relief bill a better chance of passage, even though the move has already irked Democrats who fear that it goes too far in weakening supervision of the banking industry.
Reporting by Michael Flaherty