House panel votes to overhaul bank law

Measure would gut post-Recession Dodd-Frank Act.

House WASHINGTON — Republicans took a major step toward their long-promised goal of unwinding the stricter financial rules created after the 2008 crisis, pushing forward sweeping legislation that would undo much of President Barack Obama’s landmark banking law.

A House panel on Thursday approved Republican-written legislation that would gut much of the DoddFrank law enacted by Democrats and signed by Obama in an effort to prevent a recurrence of the Great Recession. The party-line vote in the Republican-led House Financial Services Committee was 34-26.

“I can’t do a good James Brown, but I feel good,” said Rep. Jeb Hensarling, the normally reserved Republican chairman of the committee, referring to the singer often called the godfather of soul.

Republicans argued that the law passed under President Barack Obama is slowing economic growth because of the cost of compliance and by curbing lending.

Democrats warned the bill will create the same conditions that led to the financial crisis and pushed the economy to the brink of collapse.

Rep. Maxine Waters, the panel’s senior Democrat, called it “a deeply misguided measure that would bring harm to consumers, investors and our whole economy.”

“The bill is rotten to the core and incredibly divisive,” Waters said. “It’s also dead on arrival in the Senate, and has no chance of becoming law.”

After attempts in recent years to overhaul the DoddFrank legislation, the Republicans were heartened this time by a sympathetic Republican White House. President Donald Trump has denounced Dodd-Frank and promised that his administration would “do a big number” on it.

The new bill now goes to the full House for a vote, but supporters admit that the path will be much more difficult in the Senate, where Democratic support will be needed.

The bill would repeal about 40 provisions of the Dodd-Frank Act. Banks could qualify for much of the regulatory relief in the bill so long as they meet a strict basic requirement for building capital to cover unexpected big losses.