A House committee advanced contentious legislation Tuesday that would overhaul the Dodd-Frank financial reform law.
The House Financial Services Committee narrowly approved the bill from Chairman Jeb Hensarling (R-Texas) by a vote of 30-26. Every Democrat opposed the measure, and all but one Republican, Rep. Bruce Poliquin (Maine), supported it.
{mosads}The legislation would make a series of dramatic changes to Dodd-Frank. It was quickly passed by the committee after less than two hours of debate because Democrats didn’t even attempt to amend it, instead rejecting it out of hand.
Rep. Maxine Waters (Calif.), the top Democrat on the panel, dismissed the measure as a political stunt, a “highly partisan, damaging piece of legislation.”
“This bill is so bad that it simply cannot be fixed,” said Waters. “Democrats will not offer any amendments, and we move to dispense with this political theater.”
The panel adopted the language drawn up by Hensarling and his staff and passed it on to the full House.
One GOP committee staffer said Democrats effectively threw in the towel on the issue by refusing to offer amendments.
“Utter surrender,” said the staffer. “Basically what they did today was say they have nothing to offer except the status quo.”
The measure is not expected to garner attention by the full House in the waning days of this Congress. But the plan is seen by many as a potential framework for Republicans to change Dodd-Frank should they control Congress and the White House after the elections.
Tuesday’s brief markup was a repeat of the battles the committee has fought on financial regulation over the last several years. Republicans argue that Dodd-Frank has stifled banks, particularly small ones, and held back the economy without appropriately addressing threats in financial markets.
Democrats dismissed Republican attempts to alter Dodd-Frank, saying they would gut existing rules and put the country at risk of another financial collapse.
Hensarling’s bill would make sweeping changes to how Washington regulates Wall Street. It would abolish huge portions of Dodd-Frank, place additional checks on new agencies created by the law and give banks an opportunity to avoid remaining regulations.
A centerpiece of Hensarling’s plan is a provision that would allow banks to avoid regulatory requirements by raising the amount of capital they hold.
Banks have yet to sign on to the approach but say they are reviewing it.
The bill also includes a host of other contentious provisions, including several changes to the Consumer Financial Protection Bureau (CFPB) long sought by Republicans. The bill would place the agency’s budget under the control of Congress and replace its director with a bipartisan commission.
Democrats singled out the CFPB proposals for scorn, noting that just days ago, that agency had struck a large settlement with Wells Fargo after the bank admitted employees created millions of fake accounts to meet sales goals.
“At a time when we learn about Wells Fargo … thank you for bringing this bill forward so we can shine a light on exactly what you’re trying to do in dismantling Dodd-Frank,” said Waters.
The bill also includes language authorizing an audit of the Federal Reserve’s monetary policy and a repeal of the “Durbin amendment,” which set limits on debit card fees and led to a brutal lobbying battle between the retail and banking industries.
The two parties spent much of the day’s debate arguing over which side was actually working on behalf of Wall Street. Democrats repeatedly assailed the bill as a Wall Street wishlist. But Republicans pointed out that it was the Democratic presidential nominee, Hillary Clinton, who was receiving industry donations, rather than their nominee, Donald Trump.
“We believe government isn’t the solution to every problem that we face,” said Rep. Sean Duffy (R-Wis.).