GOP-run House votes to roll back post-2008 financial rules

H.R. 10: the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act is meant to end taxpayer-funded bailouts of Wall Street banks and create more opportunities for Americans on Main Street, but the Alabama delegation's sole Democrat, 7th District U.S. Rep.

Congressman Leonard Lance (NJ-07) supported the Financial Choice Act which repeals the Dodd-Frank Law that created bank bail outs with taxpayer money and imposed regulations that contributed to the closing of forty-two New Jersey community banks. But in the push to overhaul Dodd-Frank, Republicans said the biggest banks have only gotten bigger while local banks and credit unions are dwindling.

Financial reform advocates argue the Choice Act would leave the USA economy vulnerable to another financial crisis.

No Democrats voted for the House bill on Thursday, which was overshadowed by the testimony from fired FBI director James Comey about the Russian Federation investigation and his interaction with US President Donald Trump.

The bill would repeal a rule that bans banks from engaging in propriety trading or forming certain relationships with private equity funds. It also exempts smaller banks from Dodd-Frank regulations and undermines the authority of Financial Stability Oversight Council. The bill also redefines the agency's vaguely defined ability to determine which financial products and services Americans can purchase and requires the CFPB to obtain permission before collecting consumers' personally identifiable information. In February Trump called Dodd-Frank a "disaster".

Republicans argue that regulations under Dodd-Frank have throttled the banking industry and made it hard for small business and individuals to receive loans. Further, a handful of Republican senators immediately rejected the bill, signaling that they would start work on a new version of the bill virtually from scratch. The Senate has been working on another measure that is more focused on easing regulations on community banks.

"I've spent my career taking on the big banks and other financial institutions that take advantage of the people they are supposed to serve", Caforio said. Authored by House Financial Services chairman Jeb Hensarling of Texas, the bill has little chance of survival in the Senate, where the support of at least some Democrats would be required. R Street encourages all House members to send a message to their Senate counterparts that they should move quickly on financial reform.

The American Bankers Association applauded the House vote, saying the bill would "fix financial rules that are holding back the US economy, and doing little to enhance safety and soundness". Nonetheless, it opens the door to rescinding or revamping numerous financial industry regulations instituted in the wake of the 2008-2009 financial crisis.

  • Zachary Reyes