House GOP on track to undoing post-2008 financial rules
- Author: Leroy Wright Jun 09, 2017,
Jun 09, 2017, 9:19
The House on Thursday voted to free Wall Street from numerous strict constraints put in place after the 2008 financial crisis, the opening salvo in what is likely to be a protracted battle over deregulation of the powerful banking industry. "That seems to matter little to House Republicans who appear determined to deregulate the financial industry", said Lisa Gilbert, vice president of legislative affairs at Public Citizen, in a statement.
Among those supporting the bill is Rep. Elise M. Stefanik, R-Willsboro.
House Republicans say Dodd-Frank is full of unnecessary government intrusion and rolling back that law's regulations will help small businesses grow and create jobs. She added the bill "pushes back against this excessive regulation so that our local financial institutions can give needed capital to allow our small businesses to thrive". Aspects of the legislation could be implemented by the Trump administration, .
This rule, which bars the biggest banks from trading for their own profit, would be repealed.
"We are not seeking to roll back all of the policy response, all of Dodd-Frank", said Rob Nichols, president and CEO of the American Bankers Association.
The House voted along party lines Thursday to repeal numerous stricter regulations enacted after the 2008 financial crisis, taking the first step in a long-held Republican desire to roll back landmark rules they complain are hurting banks, restricting consumer credit and slowing economic growth.
The bill from House Financial Services Chairman Jeb Hensarling (R-Texas), known as the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act, is considered dead on arrival in the Senate, as Democrats are certain to filibuster such sweeping changes to the Dodd-Frank financial reform law.
The GOP-led bill, called the Financial Choice Act, is unlikely to become law as it isn't expected to earn enough support in the Senate. Labor unions and others on the left have been much more critical of the proposal.
"[The Senate is] going to have to get something passed, and I think, increasingly, the mere fact that we would pass the Financial CHOICE Act will create greater momentum for this to get done", Hensarling said on CNBC.
The Financial CHOICE Act now moves onto the Senate for consideration. Now, community banks are forced to hire armies of costly compliance officers to keep up with Dodd-Frank's complex, onerous regulations, leading to reduced services and increased costs for consumers.
On Monday evening, the president tapped Joseph Otting, a former colleague of Treasury Secretary Steven Mnuchin at OneWest to run the Office of the Comptroller of the Currency.
"With the community banks, they paid the price for the sins of the big banks", Comer (R-Ky.) said. Created by Democrats and given the authority to act without Congressional oversight, the CFPB is effectively the most powerful, unaccountable agency in US history. They say it could lead to conditions that would result in another economic crisis.
Wall Street bonuses rose for the first time in three years in 2016 to an average of $138,210. "Dismantling the law will force consumers to go it alone against Wall Street".
Unlike the House, Republicans will need to sway at least eight Democrats to pass a regulatory reform bill to cross the 60-vote threshold.
"Democrats have shown we're willing to work with Republicans to tailor the rules where it makes sense, but not if it means killing the reforms that have made the financial system safer and fairer", Brown said in a statement.
Attempts to weaken the consumer protection agency have drawn particular ire from Democrats.
Democrats disagree, saying the bill has important merits in consumer protection regulations.
"It is the cop on the beat that polices all sorts of nefarious activity that can take place between financial institutions and customers that are the subjects of unfair or deceptive practices", Kildee said. The CFPB used those powers to fine Wells Fargo $100 million past year for opening up to 2 million accounts customers did not ask for or know about.
Hensarling, who also serves as chairman of the House Financial Services Committee, said the legislation would bring deregulation.
The legislation would exempt smaller banks from a number of Dodd-Frank requirements.