After the big financial crisis, DC gave us Dodd-Frank which they told us would prevent such crises from happening again in the future. Not everyone agreed the legislation would do that then and not everyone agrees that it has helped now. While everyone was watching James Comey testify, the House of Representatives today passed a bill that would gut Dodd-Frank.
The House of Representatives pushed through a bill Thursday that would gut many of the key banking reforms implemented after the financial crisis.
In a primarily partisan vote, the House passed the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs Act, a highly controversial measure that stands virtually no chance to pass the Senate.
Among the most significant provisions are measures that allow banks to escape heightened regulatory requirements and cut stress tests back from their current annual schedule, while the bill also eviscerates the Consumer Financial Protection Bureau.
President Trump campaigned on getting rid of Dodd-Frank, which many say is a job-killer.
“This is a symbolic victory for the House Republicans,” said Sean Tuffy, who oversees global regulatory intelligence at Brown Brothers Harriman. “The Senate’s been pretty clear that they’re going to pursue financial regulatory reform, but on their own terms.”
The Choice Act represents the second major piece of legislation the House has passed that will have little chance of becoming actual law. GOP lawmakers celebrated the passage of the American Health Care Act in early May even though that too is likely to see substantial changes.
If the bill’s opponents are any measure, it must be a pretty good bill.
In the House version, regulatory reform would see the elimination of a process set up to unwind financial institutions that become deemed too big to fail because of their interconnectedness.
The CFPB also would be reconstituted and renamed, with the director appointed by the president and the agency losing much of its power.
Opponents have labeled it the “Wrong Choice Act,” with Rep. Maxine Waters, D-Calif., calling it “one of the worst bills I have seen in my time in Congress.”
As with the health care reform bill, the Choice Act probably won’t make it through the Senate in anything close to its present state.