House lawmakers are poised to pass the “crown jewel” of the GOP-led regulatory reform effort on Thursday, effectively gutting the Dodd-Frank financial regulations that were put in place during the Obama administration.
Called the Financial Choice Act, the Republican bill seeks to undo significant parts of the 2010 financial reform law.
Crafted by House Financial Services Chairman Jeb Hensarling, the bill is expected to pass despite vehement objections by Democrats to preserve the sweeping law aimed at preventing another financial crisis and protecting American consumers. For any bill to pass in the House, itrequires at least 218 votes.
Republicans criticize the Dodd-Frank regulations as the primary driver for anemic economic growth in the U.S. and for enshrining too-big-to-fail, which they say paves the way for future taxpayer bailouts of the country’s biggest banks.
On Wednesday, House Speaker Paul Ryan told reporters Hensarling’s bill would keep the GOP’s promise to cut onerous financial regulations in order to help create jobs and foster economic growth.
“We see the Financial Choice Act as the crown jewel of this effort,” Ryan said at a press conference. “The Dodd-Frank Act has had a lot of bad consequences for our economy, but most of all in the small communities across our country.”
Hensarling’s bill would give the president the power to fire the heads of the Consumer Financial Protection Bureau, a consumer watchdog agency created under Dodd-Frank, and the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, at any time for any — or no — reason.
It also gives Congress purview over the CFPB’s budget, meaning lawmakers could defund the agency entirely.
The GOP proposal would also bar the Federal Deposit Insurance Corp. from overseeing the so-called living will process, which requires banks to write up plans on how they would safely be unwound in the event of a collapse. The FDIC and the Fed are the two regulators responsible for overseeing this requirement under the 2010 law.
Democrats objected to the bill calling it the “Wrong Choice Act.” They say it would return the country to the “regulatory Stone Age” and be a disaster for the U.S. financial system.
“We are putting taxpayers again in harm’s way,” said New York Democrat Carolyn Maloney, speaking on the House floor on Wednesday.
Minority lawmakers also argue Hensarling’s bill would gut consumer protections and allow banks to make risky investments that required taxpayers to come to the rescue of the nation’s largest financial institutions almost a decade earlier.
In an editorial posted on Medium this week, Maxine Waters, the top Democrat on the House panel, said “Donald Trump and Republicans want to go back to the bad old days and lead all of us down the road to another financial crisis.”
So what’s next?
Should the House bill pass, its destiny will be in the hands of the Senate.
Senate Republicans will likely seek to craft their own companion measure to overhaul the Dodd-Frank regulations.
Led by chairman Mike Crapo, the GOP senators say they want to take a bipartisan approach to creating a regulatory relief bill for Wall Street and community banks. Crapo has been working closely with his counterpart Sherrod Brown, a top Democrat on the panel, to find common ground.
“Democrats have shown we’re willing to work with Republicans to tailor the rules where it makes sense, but not if it means killing the reforms that have made the financial system safer and fairer,” Brown said in a statement.
Crapo has vowed to work with all stakeholders, including the Trump White House and regulators, “to strike a balance” in achieving smart regulation that spurs the U.S. economy.
The Idaho Republican has set his own target of early 2018 to pass major bank reform legislation.
Unlike the House, Republicans will need to sway at least eight Democrats to pass a regulatory reform bill to cross the 60-vote threshold. GOP senators currently hold 52 seats in the Senate.
Those who closely follow the debate believe there’s no chance Hensarling’s bill would pass the Senate as is. Rather, they expect the upper chamber to advance a separate regulatory relief bill of their own.
“We continue to see no path forward for this legislation in the Senate,” said Jaret Seiberg, an analyst with Cowen & Co., in a note to clients ahead of the House vote.
Senate Republicans will have two options to advance President Trump’s promise to dismantle the “horrendous” Dodd-Frank law.
They could try to pass a regulatory relief bill through reconciliation, which only requires a 50-vote majority to pass the Senate. That would likely mean a smaller number of limited changes to the Dodd-Frank Act rather than a major single legislative package.
Or they could leave the 2010 regulatory reform law intact and put the onus on regulators, like the Federal Reserve and the Federal Deposit Insurance Corp., to rewrite some of the rules.
“Much of the language in Dodd-Frank is vague and gives a lot of discretion to regulators on how they write the rules so, over time, I expect the Trump administration will amend some of the Dodd-Frank rules,” said Brian Gardner, a policy analyst with Keefe, Bruyette & Woods, in a podcast.
Any changes to the Dodd-Frank regulations, however, require the approval of those in top regulatory posts at three bank regulatory agencies — the Fed, the FDIC and the Comptroller of the Currency — several of which the president has yet to nominate. Trump has yet to fill three open slots on the Fed board, including a new regulatory czar.
On Monday evening, the president tapped Joseph Otting, a former colleague of Treasury Secretary Steven Mnuchin at OneWest to run the Office of the Comptroller of the Currency. He will oversee more than 1,000 lenders, including big Wall Street banks. His position still requires Senate approval.
The spotlight on the financial reform this week could “convince the White House that it’s time to act on these key nominations,” said Seiberg.
http://money.cnn.com/2017/06/08/news/economy/house-dodd-frank-repeal/index.html
I can’t believe this garbage lasted this long! Barney the pervert and Dodd the over paid asshat both should have been keel hauled by a ship ladened with barnicles.
I have no use for Dodd or Frank, but I am curious as to why you would support an action that will allow Goldman Sachs to once again take junk bonds and put them into the working man’s 401(k).
This action is absolutely for Steve Mnuchin and the rest of the criminals who should have been hung in 2008. With Glass-Steagall gone, they once again will be completely unregulated. (Are you being de-regulated in conducting the business in your truck?) And again, this benefits the worst enemies we have, the bankers. So why do you support it?
Hey I take offense to that, I can be useful at times 🙂
I don’t understand your comment Henry, I have never supported anything from this act.
I’ve written articles about what a mess this was.
OK, after reading the article again, I see your point, no,I don’t support any of what is going on here.
I just think that these two started something that should have been wiped out from the beginning. All this had done is bring in funny money that was derived out of thin air, obviously.
Derivatives are if nothing else, evil. This garbage wiped out millions.
Mark,
I appreciate the debate. Maybe I don’t understand the Dodd-Frank Act. I do know that it upset the international bankers like Steve Mnuchin and Wilbur Ross and that these international quadbillionaires wanted it removed, and now the quadbillionaire Trump is sitting in the White House and has at his side Steve Mnuchin, the CEO for Goldman Sachs that was the kingpin in the derivative fraud, and Wilbur Ross, straight from Rothschild, and I guarantee both of them are dancing a jig right now as they plan more derivative fraud.
It is my understanding that Dodd-Frank was aimed at going for the regulators who allowed Standards and Poor to rate junk bonds as triple A derivatives which working people’s 401(k)s bought as triple A derivatives for their retirement. Steve Mnuchin did this in league with the government regulators he obviously paid off.
Here is the most basic explanation I can find of Dodd-Frank:
BREAKING DOWN ‘Dodd-Frank Wall Street Reform and Consumer Protection Act ‘
The Financial Stability Oversight Council and Orderly Liquidation Authority monitors the financial stability of major firms whose failure could have a major negative impact on the economy (companies deemed “too big to fail”). It also provides for liquidations or restructurings via the Orderly Liquidation Fund, which provides money to assist with the dismantling of financial companies that have been placed in receivership, and prevents tax dollars from being used to prop up such firms. The council has the authority to break up banks that are considered to be so large as to pose a systemic risk; it can also force them to increase their reserve requirements. Similarly, the new Federal Insurance Office is supposed to identify and monitor insurance companies considered “too big to fail.”
http://www.investopedia.com/terms/d/dodd-frank-financial-regulatory-reform-bill.asp
Now Mark, I will acquiesce that in enacting Dodd-Frank through contracting new agencies, the theft and fraud is busily at hand and that all the money spent on Dodd-Frank will be stolen through contract fraud. All I am saying is that the idea of doing anything to the bankers who are our worst enemy is a good idea, even if the implementation will be a lie.
Bottom line, the international bankers didn’t like it so I automatically have to like it. 🙂 The idea of it at least.
“How does Dodd-Frank affect derivatives?
Dodd-Frank requires that the riskiest derivatives—like credit default swaps—be regulated by the SEC or the Commodity Futures Trading Commission(CFTC).
To help make them more transparent, a clearinghouse of sorts— similar to the stock exchange—must be set up so these derivative trades can be transacted in public.
But Dodd-Frank left it up to the regulators to determine exactly the best way to put this clearinghouse into place.
“And not all derivatives will be subject to the law. The Securities and Exchange Commission and the Commodity Futures Trading Commission approved a rule that would exempt some energy companies, hedge funds and banks from derivative oversight.”
See what I mean?
Dodd Frank really didn’t regulate sht.
Mark,
I acquiesce that it was a contract fraud scheme. We are looking at the same thing, but you do not see what I see.
Try this. In being a truck driver you are regulated to the point that so much of your time spent is spent complying with regulations that you have to run a second set of logs and not sleep just to exist. Remember you are a free sovereign and they can’t regulate you.
Trump pointed his finger and talked about “the forgotten guy” that he was going to make things right with. What Donald Trump’s action did was cut back on the paperwork Steve Mnuchin, Wilbur Ross, and company will have to endure to steal more through derivative fraud. Now tell me, are you doing less paperwork today?
When they scream deregulation, we can’t automatically jump up and say “yeah”. We have to ask, “deregulate who?”
And finally Mark, Trump said we are going to go by the Constitution now. Now the Constitution would allow for the regulation of a foreign bank/corporation that was operating inside our borders, whereas it forbids the regulation of you via the Bill of Rights.
Now ask yourself, who is Trump working for, you or the foreign CEO Steve Mnuchin? I think you know the answer, the question is, is that all right with you?
Of course not!
BTW AS OF Dec 17, 2017 they,re forcing us to use electronic logs, no more paper logs. No more phantom logs. Now, is that constitutional? Nope.
How about jobs being taken because of automation? Is that constitutional? Hell no, it,s evil as Hell.
Anyway, I’m rambling….great to back and forth with you brother…
A good exchange in our quest for truth and reason.