Republican aims to replace Dodd-Frank
A top House Republican on Tuesday unveiled a sweeping plan to replace the Dodd-Frank financial reform law, which has been fiercely criticized as overly burdensome by GOP lawmakers, Wall Street executives and industry officials.
Rep. Jeb Hensarling of Dallas, chairman of the House Financial Services Committee, called the 2010 law “a grave mistake foisted upon the American people” as he laid out the alternative that Republicans could seek if they win the White House in November.
He outlined a plan that would repeal or loosen a slew of new Dodd-Frank regulations in order “to offer all Americans opportunities to raise their standards of living and achieve financial independence.”
A key provision would reduce the power of the new Consumer Financial Protection Bureau and allow banks to increase the amount of capital they hold to avoid stricter regulatory oversight.
“Simply put, Dodd-Frank has failed,” Hensarling said in a speech to the Economic Club of New York. “It’s time for a new legislative paradigm in banking and capital markets.”
The complex new legislation has virtually no chance of passing Congress this year. And President Barack Obama would almost certainly veto any bill rolling back Dodd-Frank, which is one of his signature accomplishments.
Obama last week criticized continued Republican attempts targeting the law. “How it is that somebody could propose that we weaken regulations on Wall Street?” Obama said in a speech in Indiana. “Because of their reckless behavior, you got hurt.”
But Hensarling’s plan is a road map of what Republicans could try to accomplish on financial regulation if the party wins the presidency and retains control of Congress in the November elections.
Donald Trump, the presumptive Republican presidential nominee, said last month that he was drawing up plans that would “be close to dismantling Dodd-Frank.”
“Dodd-Frank has made it impossible for bankers to function,” Trump told Reuters. “It makes it very hard for bankers to loan money for people to create jobs, for people with businesses to create jobs. And that has to stop.”
Dodd-Frank passed Congress with almost no Republican support in the wake of the 2008 financial crisis.
The law toughened regulations on banks and other financial firms, set up a powerful panel of regulators to watch for signs of instability and created a new consumer bureau, which has broad authority to oversee credit cards, mortgages and other financial products.
Republicans have been trying unsuccessfully to scale back the law since taking control of the House in 2011.
Hensarling’s Financial CHOICE Act, which stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs, incorporates several bills that have passed the House but failed to become law with Obama in the White House.