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. So far the bill has skated by on Republican support, so attaining the necessary 60 votes in the Senate is likely to be a challenge and could result in the addition of amendments that will water down much of the language. Republicans hold just a four-vote majority.
Dubbed the Financial Choice Act, the bill is the centerpiece of Republican promises to scrap regulations on the finance industry.
It would restructure the Consumer Financial Protection Bureau, repeal the Volcker rule that restricts banks from speculative trading, and remove the so-called orderly liquidation authority, which provides regulators with a process for winding down large financial institutions in distress.
The bill's most important provision would allow banks the sensible choice to maintain substantial equity capital in exchange for a reduction in onerous and intrusive regulation. "People believe there should be more - not less - regulation of Wall Street".
Republicans argue that regulations under Dodd-Frank have throttled the banking industry and made it hard for small business and individuals to receive loans. "We can not go back to a time when predatory lenders and other bad actors abused consumers and brought our economy to the brink of collapse".
"We must reverse this trend, and I am pleased that the TAILOR Act has passed through the House as part of CHOICE".
The main provisions of the Act allow the president to fire the heads of a number of Dodd-Frank regulatory agencies, including the Consumer Financial Protection Bureau, at will. Democrat critics said it would "pave the way" for economic damage on the scale of the financial crisis or worse.
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Meeting that threshold would require JPMorgan Chase (JPM) to boost its reserves by $107 billion; $82 billion for Goldman Sachs and $45 billion by Bank of America.
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.
Democratic lawmakers are overwhelmingly opposed to the bill, which also faces major obstacles in the Senate.
Hensarling, speaking to reporters in Washington Thursday, said Crapo could try to attach changes to Dodd-Frank to a must-pass bill, such as legislation that funds the government.
According to the House Committee on Financial Services, we lose one community bank or credit union per day.
Lance added that those who have lost the most under Dodd-Frank are those who can't afford to take their business elsewhere. "Here's the bottom line: Donald Trump and Republicans want to open the door to another economic catastrophe like the Great Recession and return us to a financial system where reckless and predatory practices harm our families and communities".
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