2018.05.2222:22:00UTC+00U.S. to Relax Dodd-Frank Banking Rules as it Clears Congress Hurdle

A move to ease U.S. banking rules put in place in the wake of the financial crisis has cleared its final stage in Congress.

The House of Representatives voted 258-159 to approve the measure, forwarding it to the president to sign into law.

The bill, which has secured support from both the Republican and Democratic parties, reduces the oversight requirements for lenders with less than $250 billion in assets, among other measures.

Supporters of the bill said it will help lenders grow, but critics said that the measure could result in a return to reckless behaviour among lenders.

Republicans have repeatedly vowed to repeal the 2010 financial regulations called Dodd-Frank. They said that the law was overly complex and costly, putting smaller banks at a disadvantage and prohibiting economic growth and lending.

Under the Dodd-Frank rules, large financial institutions are required to hold more money to use in the event of a financial shock and to have increased protections for consumers such as those taking out mortgages. It also requires the banks to use improved stress tests aimed at measuring their ability to weather a severe economic downturn.

It also made banks with over $50 billion in assets automatically qualified to strict levels of oversight.

After the amendments to the measure, only around a dozen of financial institutions will be automatically put under the strictest rules.