A bill introduced this week by Senate Banking Committee Chairman Richard Shelby (R-Ala.) could spare 25 mid-size lenders from annual stress tests and having to prepare living wills, exercises that cost banks millions of dollars a year, Bloomberg News reported today. Among firms that could get relief are U.S. Bancorp, Bank of New York Mellon Corp. and Capital One Financial Corp. Only the six largest U.S. banks have more than $500 billion in assets. The proposed change is part of a bill that would mark the biggest revision of the 2010 Dodd-Frank Act. Some Democrats have said that they’re open to raising the threshold, though not as high as Shelby proposed, which could lead to a compromise. If it’s set at $250 billion, as some analysts expect, regional banks such as SunTrust Banks Inc., BB&T Corp. and Fifth Third Bancorp would get a reprieve. Wherever the bar is set, the bill would allow regulators to designate banks below that level as systemically important after an elaborate process that gives firms a right to appeal. A committee hearing on the bill is scheduled next week.
