Dodd-Frank regulations weakened by House

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 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 hampered the economy.

“Our community banks are in trouble,” said Speaker Paul Ryan, R-Wis. “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 expected, but the Republican overhaul of the 2010 Dodd-Frank law is unlikely to clear the Senate in its current form.

Still, President Donald 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 of 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 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.

They also oppose efforts to sharply curtail a consumer protection agency’s power to pursue companies that it determines have participated in unfair or deceptive practices in their financial products and services. The Consumer Financial Protection Bureau, led by Ohioan Richard Cordray, has returned $29 billion to 12 million consumers who were victims of deceptive marketing, discriminatory lending or other financial wrongdoing.