The House Financial Services Committee is expected to vote Wednesday on a Republican bill to uproot the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The panel began marking up on Tuesday the Financial CHOICE Act, sponsored by Chairman Jeb Hensarling (R-Texas), which would repeal major parts of the post-recession financial regulation. Federal agencies and authorities created and expanded by the law would be drawn back and conducted in closer oversight of Congress, all long-sought GOP goals.
After the committee recessed at midnight Wednesday, the mark up resumed shortly after 9 a.m., when the panel rejected several Democratic amendments on party-line votes. Democrats are fiercely opposed to the bill and have been prolonging the contentious hearing in protest.
{mosads}An additional round of amendment votes is expected Wednesday evening. A vote on recommending the bill for passage will likely occur before the House is scheduled to recess on Thursday morning.
The committee voted against several amendments to the bill offered by Democrats that would undo provisions sought by Republicans and the financial sector.
An amendment from Rep. Nydia Velazquez (D-N.Y.) would have maintained direct funding of the Consumer Financial Protection Bureau through the Federal Reserve, while the CHOICE Act gives Congress control of the CFPB’s budget.
Under Hensarling’s bill, the CFPB would lose its independent agency status and its director would be fireable by the president. The president would also appoint and remove a deputy director, and the new bureau would be limited to enforcing current laws, losing its power to crack down on “unfair or deceptive acts or practices.”
Other amendments would have directed the revamped CFPB, renamed the Consumer Law Enforcement Agency, to create a committee on communities underserved by the financial sector and to ensure crackdowns on illegal foreclosures and fraud targeting 9/11 first responders.
Republicans dismissed them during the hearing as redundant and unnecessary expansions of federal power, covering for lax law enforcement.
Hensarling’s bill is likely to pass the full committee, and is almost universally supported by the panel’s Republicans. While the bill could easily pass the the full House, it’s not expected to be touched in the Senate, where it would need Democratic support to pass.
Some GOP members are critical of a provision in the bill that would repeal a Dodd-Frank measure capping fees charged by debit companies to retailers for card processing.
One such member is Rep. Bruce Poliquin (R-Maine), who voted against the 2016 version of the CHOICE Act. He asked Hensarling to allow a full debate of the “Durbin Amendment,” named after Senate Minority Whip Dick Durbin (D-Ill.).
Rep. Dennis Ross (R-Fla.) told The Hill last week that he also supports the Durbin Amendment but would vote to send the CHOICE Act to the floor. He said he remains undecided on final passage.
Powerful bank lobbies, such as the American Bankers Association, Independent Community Bankers of America and Consumer Bankers Association, have lined up behind Hensarling’s bill, the most expansive effort to reduce financial regulations imposed in Dodd-Frank.
The new bill would make substantial changes to how federal regulators monitor the largest banks and financial firms. The federal government would no longer have the power, nor pool of money collected from bank fees, to dismantle failing banks and firms that could trigger an economic crisis upon collapse. Instead, the bill creates a new bankruptcy chapter that seeks to insulate financial markets from a failing bank’s fallout.
Large financial firms would also only have to submit to federal stress tests once every two years instead of annually, but they would still have to do an internal stress test each year. The bill also allows large firms to opt out of certain tests upon gathering a high enough threshold of cash.
Naomi Jagoda contributed to this report, which was updated at 9:53 a.m.