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US Senate banking bill proposes easing of restrictions for smaller banks

The US Senate is considering easing mortgage rules for the financial industry besides increasing the congressional scrutiny of Federal Reserve in a regulation relief bill.

According to a proposal by the Senate banking committee chairman Richard Shelby, the government could announce the biggest roll back of financial regulatory reform since the financial crisis of 2008 that could release close to 30 firms from strict Federal Reserve oversight.

In his proposal, Shelby has suggested the easing of regulations on smaller banks in the country that would provide them relief from annual privacy disclosure requirements and authorization for privately insured credit unions for becoming members of the Federal Home Loan Bank system.

He also called for increased transparency of the Financial Stability Oversight Council that looks into the risks to financial system.

The draft also speaks about the requirement for the Federal Open Market Committee, the Fed’s policy-making committee to deliver quarterly reports to Congress that would comprise analysis and data related to its monetary policy decisions.

Shelby has also suggested that the Federal Reserve Bank of New York president should be appointed by the White House and that the appointment should be confirmed by the Senate, reported the United Press International.

A few banks that could benefit from the move are Atlanta-based SunTrust, Regions Financial, Citizens Financial, American Express and Capital One, reported the Financial Times.

While banks with assets between $50bn and $500bn will have to undergo the supervision, bigger banks such as JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley will have to be supervised by the Federal Reserve oversight.