On May 24, a multi-racial gaggle of Congress members wriggled for prime positioning around Donald Trump as he prepared to sign the Economic Growth, Regulatory Relief, and Consumer Protection Act into law. The bill considerably scales back the Dodd-Frank Act reforms passed in 2010 in response to the financial crash and was passed with the votes of 33 Democrats in the House and 17 in the Senate. It essentially frees small community banks and credit unions from many of the Dodd-Frank regulations, including reporting requirements that would help identify racially discriminatory banking practices.
“By liberating small banks from excessive bureaucracy,” said Trump at the signing, “we are unleashing the economic potential of our people.”
It also unleashes a greater potential for small banks to financially burden people of color and people with low incomes. Under Dodd-Frank, banks large and small were subjected to stricter regulatory monitoring, but the new law exempts small banks from much of that oversight. During the Occupy Wall Street protests, many activists pushed for people to close their accounts at large, corporate banks and to, instead, open accounts in smaller community banks and credit unions, under the premise that they are less prone to exploitative banking practices. That reputation is not well deserved, though, according to a study released today on the “Racialized Costs of Banking” by the D.C.-based think tank New America.
[For more on this story by BRENTIN MOCK DAVID & MONTGOMERY, go to https://www.citylab.com/equity...munity-banks/563309/]
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