Senate OKs measure restoring some Federal Reserve power
WASHINGTON (MarketWatch) — A key piece of the Federal Reserve’s authority was on the road to being restored Wednesday after senators approved a provision that would allow state-chartered banks to continue to register with the central bank.
Specifically, lawmakers passed an amendment, by a vote of 90 to 9, removing a provision in the Senate bill that would have forced all state-chartered community banks that currently have the Fed as their federal regulator to register with the Federal Deposit Insurance Corp.
Instead, the Senate provision would mirror House bank reform legislation approved in December that continues to let state-chartered banks choose whether they want to have the Fed or the FDIC oversee their operations.
Without the amendment, which was introduced by Sens. Kay Bailey Hutchison, R-Texas, and Amy Klobuchar, D-Minn., the Fed would have been responsible only to oversee financial institutions with $50 billion or more in assets. Currently, roughly 800 state-chartered community banks are registered with the Fed as their federal regulator. However, the vast majority of community banks are registered with the FDIC.
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