The bill – which could serve as the starting blocks for a potential Trump administration’s overhaul of financial regulations – takes a red pen to the core language of the Dodd-Frank. The House Financial Services Committee (HFSC) is scheduled September 13 to consider the Financial CHOICE Act-H.R. 5983-which has been dubbed the “Republican alternative” to Dodd-Frank.
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The Financial CHOICE Act would, among other measures, repeal Dodd-Frank’s Title II orderly liquidation authority, which authorizes the Federal Deposit Insurance Corp.to borrow from the Treasury to lend to a failing firm, buy its assets, guarantee its obligations and pay off its creditors. Hensarling’s bill, she said, would make it “even easier for executives to escape accountability to shareholders”.
The Financial CHOICE Act moved forward by a partisan vote of 30-26 on Tuesday, generating opposite reactions from lawmakers on either side of the aisle. Every Democrat opposed the measure, and all but one Republican – Rep. Bruce Poliquin (R-Maine) supported it. Since 1864, (yes, since the Civil War) Congressional policy has granted bank regulators independent funding, to insulate them from the highly-politicized appropriations process.
The Dodd-Frank Act is officially titled the Wall Street Reform and Consumer Protection Act of 2010.
During the contentious markup of the bill, Hensarling, R-Texas, repeatedly stated his Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act offers a “better way” to economic growth and protecting investors than Dodd-Frank.
Waters and other Democrats also questioned the timing of bill, just one week after Wells Fargo was fined $100 million by the CFPB and will pay up to an additional $85 million in penalties as a effect for its employees opening as many as two million consumer accounts without the customers’ knowledge.
But Democratic committee member Rep. Nydia M. Velazquez (D-N.Y.) fired back, calling the Financial CHOICE Act a love letter to big business.
The Volcker Rule ban of certain investments by banks: gone.
Section 311 of the bill would change the structure of the CFPB from its current, effective single-director structure to a less effective five-member commission. “These provisions include a repeal of Durbin Amendment price controls on debit card interchange, common-sense reforms to excessively burdensome mortgage-lending rules, and relief from unnecessary call report and data-collection requirements”. It would also increase fines for individuals that engage in insider trading.
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“The bill holds Wall Street accountable with the toughest, strongest, strictest penalties ever – far greater than those in Dodd-Frank”, Hensarling went on to say. They did so without any major amendments, meaning it shouldn’t have any problem passing with Republican votes on the House floor.
