House GOP blocks Dem efforts to protect consumer watchdog

Ross, who voted in favor of the Dodd-Frank replacement bill during a House Financial Services Committee markup on Thursday, said in an interview that he's working with other lawmakers to strike language from the legislation - H.R. 10, the Financial CHOICE Act - that would repeal the so-called Durbin amendment.

According to The Hill, today's 34-26 party-line vote came after almost 24 hours of debate and markups of the bill, which included several amendments that would have preserved some of the provisions under the Dodd-Frank Act.

The CHOICE Act would allow banks to opt out of Dodd-Frank if they hold enough cash, and it would limit federal stress tests of major banks to every two years. The committee voted down a host of Democratic amendments that would have fundamentally altered the legislation, including measures.

Republicans argued that the law known as Dodd-Frank that passed under President Barack Obama was "strangling the economy". The Dodd-Frank law, which established a series of safeguards and layers of accountability, has drawn fierce opposition from Republicans and their allied lobbyists from the financial industry, and this bill is the vehicle GOP officials have embraced to roll back the clock.

In February 2017, U.S. President Donald Trump issued an order asking regulators to review the Act and look for legislative reforms. It now goes to the GOP-dominated House for a vote, but supporters admit that the path will be much more hard in the Senate, where Democratic support will be needed. That means the GOP will need several Democrats to join their effort. They argued Hensarling's bill would gut consumer protections and allow banks to make risky investments that required taxpayers to come to the rescue of the nation's largest financial institutions nearly a decade earlier.

But Hensarling rebutted, saying Dodd-Frank has been giving Wall Street a leg up all along. "Instead, we've had the slowest and weakest recovery of our lifetime", Hensarling said.

The bill would also reform the Consumer Financial Protection Bureau, renaming it the Consumer Law Enforcement Agency and stripping it of examination powers and "UDAAP" enforcement authority and replace Dodd-Frank's Orderly Liquidation Authority provision with a new Bankruptcy Code. Rep. Brad Sherman (Calif.) asked Hensarling to break up the bill because there are sections dealing with capital formation and mortgage lending that could get bipartisan support. Rep. Michael Capuano, D-Mass., said Republicans could have written a much narrower bill to help small banks and credit unions if that were their primary aim.

Critics of the bill argue that it undoes numerous critical protections enacted following the financial crisis and puts the nation at greater risk of another meltdown. It leaves the successful CFPB as an unrecognizable husk incapable of policing the marketplace while piling innumerable gifts on to the majority's Wall Street and payday lender patrons who will again run amok if the bill becomes law. They say Republicans are risking a return to another financial crisis.

"The real middle finger to the American people is the lack of recovery because of Dodd-Frank", said Bill Huizenga of MI.

  • Larry Hoffman