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Trump signs Dodd-Frank rollback as deregulation push continues
[WASHINGTON] US President Donald Trump on Thursday signed into law the first major rollback of the post-crisis banking regulations following after Congress approved the legislation this week.
The law frees thousands of small- and medium-sized banks from the regulatory scrutiny and stress testing created under the Dodd-Frank Wall Street reform legislation of 2010.
Democratic leaders have denounced the legislation - which still received support from some Democrat lawmakers - as an invitation to the return of the reckless financial conduct which caused the 2008 global financial crisis and the subsequent Great Recession.
Community banks and credit unions "shouldn't be regulated the same way as the large, complex financial institutions and that's what happened and they were being put out of business one by one," Mr Trump said at the White House just before signing the law.
He called Dodd-Frank a "disaster."
But the Federal Deposit Insurance Corporation this week reported the US banking sector, which includes small community lenders as well as major financial institutions, had had its most profitable quarter ever.
This would have been the case even without December's sweeping tax cuts, according to the FDIC, which said banking profits rose 27.5 per cent to US$56 billion.
Community banks saw a 17.7 per cent increase in net income for the quarter.
Under the new law, banks with up to US$250 billion in assets will be freed from Dodd-Frank's stricter oversight, including stress tests, leaving only about a dozen major US banks subject to the law's toughest oversight requirement.