House Passes Bill Ending Arbitrary $50B Threshold for SIFI Status

The House today passed H.R. 3312, the Systemic Risk Designation Improvement Act of 2017, by a bipartisan vote of 288 to 130.

A key part of the American Bankers Association’s Blueprint for Growth, the bill—introduced by Rep. Blaine Luetkemeyer (R-Mo.) and co-sponsored by Reps. Kyrsten Sinema (D-Ariz.), Roger Williams (R-Texas), David Scott (D-Ga.), French Hill (R-Ark.), Josh Gottheimer (D-N.J.), Ted Budd (R-N.C.), Steve Stivers (R-Ohio) and Gregory Meeks (D-N.Y.)—replaces the arbitrary $50 billion asset threshold for systemically important status in the Dodd-Frank Act with a more tailored, nuanced set of systemic risk indicators.

Under the bill, the Federal Reserve would review a financial institution’s size, interconnectedness, global activity and complexity to determine whether it should be subject to regulation as a systemically important financial institution. ABA applauded the bill’s passage, having noted in previous comments that “the most effective and value-added supervision regime is one that is risk-based and individually tailored, taking into account a wide variety of factors.”