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JUDY WOODRUFF: A decade after 
the financial crisis spurred 
tough financial regulation,

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the U.S. Senate took a 
step toward rolling back 
some of those rules today.

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Republicans were joined by 
more than a dozen Democrats to 
move forward with a bill easing

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requirements on banks 
worth $50 billion to 
$250 billion in assets.

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Specifically, those institutions 
wouldn't have to pass an 
annual stress test, as it's

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called, to make sure they are 
strong enough to survive a 
financial panic or keep as much

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capital on hand.

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Critics, including 
most Democrats, worry 
that these moves could 
increase the chances of

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bank bailouts in the future.

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But Senator Heidi Heitkamp, 
a Democrat from North Dakota, 
supports it, and she joins me

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now.

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Senator Heitkamp, welcome 
to the "NewsHour."

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And I want to get to the 
banking story in just a moment, 
but first I have to ask you

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about our lead tonight, and that 
is the surprise announcement 
from the White House that the

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president's chief economic 
adviser, Gary Cohn, is stepping 
down after what has clearly been

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a dispute with the president, 
who he works for, over imposing 
tariffs on imported steel

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and aluminum.

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What's your thought about that?

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How is that going to 
affect trade policy?

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SEN.

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HEIDI HEITKAMP (D), 
North Dakota: Well, I'm 
deeply concerned that 
we won't have that voice

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that is the voice of reason in 
the White House as it relates 
to economic understanding of

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the importance of trade.

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Less than 5 percent globally 
of people in the world 
live in this country.

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If we're not trading, 
we're going to fail.

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I think that one of the biggest 
concerns I have with the White 
House is their trade policy.

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Gary was a great advocate for 
common sense as it relates to 
trade, and I find it deeply

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disturbing that he 
will be leaving.

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JUDY WOODRUFF: What does it 
mean for your state or North 
Dakota if these tariffs take

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effect?

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SEN.

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HEIDI HEITKAMP: Well, 
we don't know yet which 
countries are going to be 
involved, but obviously

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all of the concerns about 
renegotiating NAFTA has 
had huge ramifications 
in our relationships

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across both borders, both 
Mexico and Canada, which are 
our largest trading partners.

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We are deeply concerned about 
the renegotiation of NAFTA and 
retaliation in the event these

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tariffs go into effect.

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JUDY WOODRUFF: Well, let me 
ask you now about this banking 
legislation that moved forward

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in the Senate today.

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As we said, it would exempt 
something like two dozen 
banks, financial companies that

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are somewhere between 
$50 billion and $250 
billion in assets.

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They wouldn't be subject 
to the same sort of federal 
oversight that they are now and

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other requirements.

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Why -- as you know, the concern 
about this is that it means if 
we come to the next financial

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crisis in this country, these 
banks are going to be back 
where we were in 2008, needing

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a big bailout from the 
federal government.

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SEN.

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HEIDI HEITKAMP: Well, I 
think that's completely 
overstating the case.

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Number one, I think at the 
top of the hour you said that 
they no longer are going to

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be subject to stress tests.

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That's not true.

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The Fed has complete ability to 
stress test and to put anyone 
back into that designation

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if it's appropriate.

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But remember this, 
because Countrywide has 
been used as an example.

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We have not changed the 
rules as it relates to 
qualifying mortgages.

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We have not changed the 
rules as it relates to 
whether the Fed can stress 
test these institutions.

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We still have 
liquidity standards.

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And so what we did is, we 
basically moved an assumption.

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And that assumption is that, 
if you're below $50 billion, 
you do not present systematic

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risk to the economy.

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We said let's take a look 
at 250 as the presumption, 
but anything below that, 
where there is systematic

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risk, could still be 
included and still be 
regulated accordingly.

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JUDY WOODRUFF: Well, there 
still would be - - as you say, 
there would be some stress

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testing, but much less than 
what we're talking about now.

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The small banks, as we 
understand it, would 
no longer -- there 
would no longer be some

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protections for homeowners, 
for example, to go to court to 
prevent wrongful disclosures.

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In other words, these banks 
are being given a break because 
they say there's just been

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too much paperwork.

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SEN.

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HEIDI HEITKAMP: I think that's 
way overstating the case.

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Let me tell about North Dakota.

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North Dakota doesn't have those 
institutions making mortgages 
because the compliance costs

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are way too expensive for 
these small community banks.

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And, as a result, they're either 
doing loans that are recourse 
loans, using other collateral

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like your paycheck, as opposed 
to your mortgage, or they're 
basically transitioning those to

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large banks like Wells Fargo.

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And when you don't have 
relationship lending, 
you're losing a big part 
of that capitalization

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in rural communities.

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And so the 
protections are there.

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And, you know, I find 
it interesting, because 
people always want to 
say, oh, these banks

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are going to take advantage 
of all these consumers.

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These banks are run 
by your neighbors.

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They're owned by your neighbors.

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They have been doing business 
for years and generations 
in these communities.

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And I think they know better 
what the community needs 
than a federal regulator.

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And let's put this 
back in focus.

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The reason why you have the 
mortgage standards that you 
have is to prevent a collapse of

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the economy using mortgage as 
a collateral in derivatives.

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So if you take these small 
community banks, they were never 
part of the too big to fail.

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And what we have created 
from too big to fail is 
too small to succeed.

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And so I have total confidence 
that my community banks know 
better what my communities need

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than a federal regulator who 
is trying to impose big bank 
standards on our small community

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banks.

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JUDY WOODRUFF: How do you know, 
though, Senator Heitkamp, that 
-- there are -- clearly, some

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regulations need to be in place.

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How do you know that the 
right regulations are 
still going to be in place?

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For example, there is concern 
about whether banks, they 
won't have to report -- some of

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them, a number of them won't 
have to report the diversity 
of people that they lend money

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to.

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In other words, there are 
some regulations in there now 
that people say that need to

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be continued, whether 
they are done in exactly 
the same way or not.

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SEN.

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HEIDI HEITKAMP: Well, 
let's take the HMDA rules.

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And that's been a point 
of contention here.

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We are not eliminating the 
standard of making sure that 
we have fair lending rules.

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There were fair lending 
rules before Dodd-Frank.

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The HMDA rules, which have 
been covered by all banks, are 
40 pages of regulation that

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doesn't actually add any 
value to making sure that 
there isn't discrimination.

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We're saying, look, we will 
eliminate that rule-making 
for the smaller institutions,

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but if you fail, if you're 
a bad actor, we're going to 
impose these regulations back on

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you.

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And the one thing that I think 
is critically important, when 
you over-regulate, eventually,

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you reach a tipping point where 
everything is at question.

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We are doing very 
modest and very limited 
changes to Dodd-Frank 
to respond to what we're

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hearing on main streets in 
small communities like mine.

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And we're proud of this bill.

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We think that the results of 
this bill have been completely 
overstated by people who have

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been advocating against this 
bill because they want to 
see fundamentally absolutely

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no change to Dodd-Frank, 
even if the regulation 
doesn't make sense.

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JUDY WOODRUFF: Senator 
Heidi Heitkamp of North 
Dakota, thank you very much.

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SEN.

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HEIDI HEITKAMP: Thank you, Judy.