House votes to eliminate Dodd-Frank provisions
- Author: Zachary Reyes Jun 21, 2017,
Jun 21, 2017, 0:58
The U.S. House of Representatives passed a sweeping Republican-led bill on Thursday that would undo numerous regulatory provisions of the Dodd-Frank Act.
Democratic lawmakers overwhelmingly oppose the GOP's revamping bill. Numerous regulations that were created in response to the financial crash have hindered economic growth, including Dodd-Frank and the decision to put Fannie Mae and Freddie Mac under government conservatorship. It would also rid US law of the notion of "too big to fail", meaning taxpayers could no longer bail out large financial institutions that run out of cash, thus making sure that any future financial failures would guarantee a systemic threat to the entire global economy.
The bill would also neuter the Consumer Financial Protection Bureau, stripping the agency of the power to regulate both payday lenders and arbitration clauses that financial institutions use to keep consumers from being able to hold them legally liable for malfeasance in court. We remember the millions of people who lost their jobs, their homes, and their life savings because of Wall Street's reckless greed. He stated last week that the regulations have stifled small businesses by making it harder to get loans.
The bill would also remove the fiduciary rule, scheduled to into affect this week, that adds tough new requirements for brokers and investment advisors to act in the best interests of their clients when dealing with retirement accounts.
Legislation he voted in favor of on Thursday that will reverse numerous regulations involved in the controversial Dodd-Frank Financial reform act.
Generally, Republicans said the regulations in the 2010 law are too cumbersome for smaller banks and don't do enough to prevent another market crash.
Opponents of the act say the reform would be disastrous for working Americans. It could provide a blueprint for regulators to rewrite the rules.
The core of the CHOICE act offers banks and financial institutions a way out of the Dodd-Frank supervisory regime and the Basel III risk-capital requirements if the banks opt to maintain higher capital levels.
"I look forward to going to conference with them soon", Hensarling said.
"Today a bill to roll back Dodd-Frank will take the final step in never being approved by the Senate", tweeted Sean Tuffy, an expert on financial regulation at Brown Brothers Harriman.
The Congressional Budget Office (CBO) estimates that the "Financial CHOICE Act" will reduce the federal deficit by $33.6 billion through 2027. "Dems enacted the strongest consumer financial protections in history".
On a day when the national spotlight was on the Senate testimony of former Federal Bureau of Investigation Director James Comey, the fight over repealing Dodd-Frank consumed the House.