NC West Virginia News

WASHINGTON, DC – Rep. Alex X. Mooney has introduced H.R. 8153, the Bank Risk Reduction Act, aimed at eliminating regulations hindering bank risk management and creating systemic risk. The legislation specifically targets Dodd-Frank’s mandatory margin requirements concerning interest rate swaps used for hedging against interest rate risk in bank assets.

The need for such legislation arose from bank failures in early 2023 attributed to poorly managed interest rate risk. Rep. Mooney emphasized the negative impact of current regulations, stating, “Unfortunately, current government regulations stemming from Dodd-Frank discourage safe bank risk management.”

Joining Rep. Mooney in this initiative, two Financial Services Committee Republicans, Reps. Byron Donalds and Andy Ogles, are original cosponsors of the bill.

Endorsing the Bank Risk Reduction Act are Americans for Tax Reform and Americans for Prosperity. Grover Norquist, President of Americans for Tax Reform, highlighted the importance of the Act in rectifying the limitations imposed on banks by Dodd-Frank since 2010. Norquist expressed his support, stating, “I am proud to support the Bank Risk Reduction Act, which will make it easier for banks to hedge against interest rate volatility.”

James Czerniawski, Senior Policy Analyst at Americans for Prosperity, praised the Act for empowering financial institutions with more flexibility in managing risk, stating, “The Bank Risk Reduction Act empowers financial institutions with more flexibility to proactively manage their risk exposure, enabling them to adapt swiftly and effectively to dynamic economic conditions.”

The introduction of the Bank Risk Reduction Act is seen as a crucial step towards promoting stability, safeguarding against systemic risks, and enhancing transparency in the banking sector.