GOP-led House votes to roll back Dodd-Frank law
WASHINGTON — The Republican-led House approved sweeping legislation Thursday to undo much of former President Barack Obama’s landmark banking law created after the 2008 economic crisis that caused millions of Americans to lose their jobs and homes.
The largely party-line vote was 233-186, as Republicans argued the rules designed to prevent another meltdown were making it harder for community banks to lend and hampering the economy.
“Our community banks are in trouble,” said Speaker Paul Ryan, RWis. “They are being crushed by the costly rules imposed on them by the Dodd-Frank Act. This law may have had good intentions but its consequences have been dire for Main Street.”
House passage was widely expected, but the Republican overhaul of the 2010 Dodd-Frank law is unlikely to clear the Senate in its current form. Senators have said they’ll spend the next few months trying to find common ground on legislation to boost the economy.
President Trump had said he wants to do “a big number” on Dodd-Frank, and the House vote marks progress toward that goal.
The GOP-led overhaul of Dodd-Frank was crafted by Rep. Jeb Hensarling, R-Texas, chairman of the House Financial Services Committee. The bill targets the heart of the law’s restrictions on banks by offering a trade-off: Banks could qualify for most of the regulatory relief in the bill so long as they meet a strict requirement for building capital to cover unexpected big losses.
Democrats overwhelmingly opposed the Republican bill, saying that the Dodd-Frank law has meant financial security for millions of people and that undoing it would encourage the kind of risky lending practices that invite future economic shocks.
The bill would repeal a rule that bans banks from engaging in trading for their own profit using federally insured deposits, or forming certain relationships with private equity funds. It would roll back a proposed rule that investment advisers who collect commissions must put their clients’ interests ahead of their own.