House votes to undo key parts of Dodd-Frank law

Pol­icy en­acted af­ter Wall Street cri­sis

The Washington Times Daily - - POLITICS - BY DAVID SHERFIN­SKI

House Repub­li­cans voted Thurs­day to evis­cer­ate much of the Dodd-Frank fi­nan­cial-reg­u­la­tions law, mov­ing to wipe out one of Pres­i­dent Obama’s sig­na­ture ac­com­plish­ments en­acted to crack down on Wall Street in the wake of the 2008 cri­sis.

GOP lead­ers said the 2010 law back­fired, im­pos­ing too many bur­dens on com­mu­nity banks while en­cour­ag­ing even greater mar­ket con­cen­tra­tion in the big banks that Democrats blamed for the fi­nan­cial crash. Repub­li­cans also said the law didn’t do enough to pre­vent an­other mar­ket crash.

“This law may have had good in­ten­tions, but its con­se­quences have been dire for Main Street,” said House Speaker Paul D. Ryan.

The 233-186 vote fell es­sen­tially along party lines, with Democrats com­plain­ing that the GOP was pan­der­ing to ma­jor cor­po­rate donors.

The bill now heads to the Se­nate, where it is likely to face a Demo­cratic fil­i­buster, given the over­whelm­ing Demo­cratic op­po­si­tion in the House.

“This is one of the worst bills I have seen in my time in Congress,” said Rep. Max­ine Wa­ters of Cal­i­for­nia, rank­ing Demo­crat on the House Fi­nan­cial Ser­vices Com­mit­tee. “This bill is a ve­hi­cle for Don­ald Trump’s agenda to dereg­u­late and help out Wall Street.”

Along with Oba­macare, Democrats tout Dodd-Frank — the bill’s short­hand named af­ter its lead­ing au­thors — as one of their sig­na­ture leg­isla­tive ac­com­plish­ments when Mr. Obama had a Demo­cratic-con­trolled House and Se­nate for the first two years of his pres­i­dency.

But the Thurs­day vote is an­other in­di­ca­tion that much of that legacy could soon be wiped out by the Repub­li­can­con­trolled po­lit­i­cal branches.

Rep. Jeb Hen­sar­ling, Texas Repub­li­can and chair­man of the House Fi­nan­cial Ser­vices Com­mit­tee, said Dodd-Frank ended up be­ing a se­ries of bro­ken prom­ises.

“The big banks are big­ger. The small banks are fewer,” he said. “We’re los­ing a com­mu­nity bank or credit union a day.”

The new bill al­lows banks that main­tain cer­tain lev­els of cap­i­tal to opt out of other reg­u­la­tions, and nixes a pro­vi­sion, known as the Vol­cker rule, which curbs banks’ abil­ity to use funds to en­gage in spec­u­la­tive trad­ing.

The bill also re­peals a pro­vi­sion in Dodd-Frank that calls on the Fed­eral De­posit In­sur­ance Cor­po­ra­tion and the Fed­eral Re­serve to is­sue rec­om­men­da­tions when it comes to seiz­ing and wind­ing down ma­jor fail­ing firms.

The leg­is­la­tion would in­stead set up a new bank­ruptcy process, with the goal of min­i­miz­ing the risk of a tax­payer-funded bailout for “too big to fail” banks.

The leg­is­la­tion also re­duces the power of the Con­sumer Fi­nan­cial Pro­tec­tion Bureau (CFPB), an in­de­pen­dent agency set up un­der Dodd-Frank that has be­come en­snared in lit­i­ga­tion over its scope and author­ity.

Repub­li­cans have been par­tic­u­larly out­spo­ken in op­pos­ing the CFPB, say­ing too much power to pur­sue le­gal ac­tion against bad ac­tors is vested in un­elected of­fi­cials, no­tably the bureau’s di­rec­tor, Richard Cor­dray.

The GOP bill al­lows the pres­i­dent to fire the CFPB di­rec­tor for any rea­son — an is­sue that’s cur­rently the sub­ject of lit­i­ga­tion be­fore the fed­eral ap­peals court in Wash­ing­ton, D.C.

“This law may have had good in­ten­tions, but its con­se­quences have been dire for Main Street,” said Speaker of the House Paul D. Ryan, Wis­con­sin Repub­li­can.

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