The Republican-crafted plan to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act is one step closer to reality after the House Financial Services Committee voted Tuesday to pass the Financial CHOICE Act.
The Financial CHOICE Act, introduced earlier this year by House Financial Services Committee Chairman Rep. Jeb Hensarling, R-TX, would replace Dodd-Frank with a “pro-growth, pro-consumer” alternative that would end “too-big-to-fail bailouts, bring significant reforms to the Consumer Financial Protection Bureau, and provide some regulatory relief for certain financial institutions.
The bill passed out of the House Financial Services Committee Tuesday by a vote of 30-26 and will now move to a full vote in the House of Representatives.
An article on the subject from the Wall Street Journal suggests that the bill is “likely” to pass a full House vote but “isn’t likely to get traction” in the Senate.
And even if it does, President Obama would certainly veto the bill, but that didn’t stop the Republican arm of the House Financial Services Committee from celebrating the narrow passage of the bill.
“The Financial CHOICE Act will help grow the economy for all Americans, not just those at the top,” Hensarling said of the vote. “It promotes strong and transparent markets to revitalize job creation in our poorest communities and ensures every American has the opportunity achieve financial independence, no matter where they start out in life.”
The bill passed out of committee without extensive discussion, negotiation, or any added amendments, which can either be a sign of a legislative slam dunk or an absolute non-starter.
It appears that the latter is the case here, as the Democrats chose not to offer any amendments to the bill.
“Mr. Chairman, this bill is so bad that it simply cannot be fixed,” Rep. Maxine Waters, D-CA, the ranking member of the House Financial Services Committee, said during the hearing.
“This markup is not a serious attempt to move thoughtful legislation, evidenced by the fact that we only had one hearing on one portion of the bill,” Waters continued.
“It's clear that this is a rushed, partisan messaging tool, though why anyone would want to push legislation to deregulate Wall Street at a time like this is beyond me,” Waters added. “So let's not waste any more time on this. Democrats will not offer any amendments, and we move to dispense with this political theater.”
The bill then moved to a vote, and passed 30-26.
The Republicans, unsurprisingly, held a different view of how the events of the day unfolded, noting that the Democrats on the committee, “despite having spent months criticizing the Financial CHOICE Act, refused to offer a single amendment to the bill.”
The Republicans also noted that the Financial CHOICE Act received “strong support” from community banks and credit unions, small business groups and conservative organizations, but not from “large” financial institutions.
“Democrats just voted against a bill that increases penalties against those who commit financial fraud,” Hensarling said of the vote.
“They just voted against a bill that ends taxpayer-funded bailouts, and they just voted against legislation that provides relief from Washington’s crushing regulatory burden for small banks, credit unions and consumers,” Hensarling continued.
“The bill holds Wall Street accountable with the toughest, strongest, strictest penalties ever – far greater than those in Dodd-Frank,” Hensarling added. “And as recent headlines attest, obviously stronger penalties are needed. It requires banks to be well capitalized to prevent another financial crisis and puts in place the toughest penalties in history to protect consumers from fraud and deception.”
As further evidence of the divide between Republicans and Democrats on this bill, both sides provided lists of organizations that support each party’s position on the bill.
According to the Republicans, among the organizations “offering praise” for the Financial CHOICE Act are the Independent Community Bankers of America, the National Association of Realtors, the U.S. Chamber of Commerce, and the National Association of Home Builders.
On the other side, the Democrats noted that the following organizations (and several others) submitted letters in opposition of the Financial CHOICE Act, including the AFL-CIO, Americans for Financial Reform, the Center for Responsible Lending, and the National Community Reinvestment Coalition.
