House Republicans Pass 'Choice' Act, Block Fiduciary Rule

Individuals need more latitude when it comes to financial decision making, according to Virginia Congressman Dave Brat (R), who voted for the Financial CHOICE Act on Thursday, which would get rid of certain parts of the 2010 Dodd-Frank financial reform bill.

U.S. Sen. Sherrod Brown of OH, the top Democrat on the Senate committee that oversees banking laws, said the proposal would gut the Consumer Financial Protection Bureau, which has returned nearly $12 billion to 29 million Americans who were cheated by shadowy debt collectors, for-profit schools, and payday lenders.

Republicans criticize the Dodd-Frank regulations as the primary driver for anemic economic growth in the US and for enshrining too-big-to-fail, which they say paves the way for future taxpayer bailouts of the country's biggest banks. "This law may have had good intentions, but its consequences have been dire for Main Street", House speaker Paul Ryan said in a statement.

Led by chairman Mike Crapo, the GOP senators say they want to take a bipartisan approach to creating a regulatory relief bill for Wall Street and community banks.

Originally passed in the wake of the 2008 housing and economic crisis to address what many felt were its root causes-including protections against systemic risk, curbs on speculative investing by large institutions and higher capital reserves-critics contended Dodd-Frank was over-burdensome and a drag on growth. Opponents chide the proposal as the "Wrong Choice Act" and say it's a handout to Wall Street and a disservice to normal investors.

The bill, headed by House Financial Services Chairman Jeb Hensarling (R-TX), passed the House with almost full Republican support, but its chances in the Senate are looking grim, according to Democratic leaders.

"Jeb Hensarling [R-Texas] & Republicans on successful House vote to repeal major parts of the 2010 Dodd-Frank financial law", Trump tweeted. "Finally, we have all financial regulatory agencies under the democratic discipline of the congressional appropriations process". The betting is that the Senate will pass its own version of the bill which will then have to be reconciled with the House's in conference.

The House voted Thursday in favor of a bill created to roll back key regulations over the banking industry implemented in the wake of the 2008 financial crisis. But it is critical part of the Trump administrations multifront effort to ease banking industry regulations and could set the terms of a potentially explosive debate on whether almost a decade after the 2008 financial crisis the banking industry is being too constrained. The legislation is likely to face stiff resistance in the Senate but it provides a roadmap of sorts for the policies the president plans to put in place as he appoints new regulators.

The Financial CHOICE Act has garnered support from business groups and free-market advocates.

  • Zachary Reyes