WASHINGTON – Members of the House of Representatives voted Thursday to deliver on their promise to repeal Dodd-Frank — the massive set of Wall Street regulations President Barack Obama signed into law after the 2008 financial crisis.
In a near party-line vote, House Republicans approved a bill, dubbed the Financial Choice Act, which scales back or eliminates many of the post-crisis banking rules. The legislation was sponsored House Financial Services Committee Chairman Jeb Hensarling (R-Texas).
Rep. Tom Reed (R-Corning, NY 23) told WRFA on Wednesday during his weekly media conference call that the measure was something he would support because it would lift strict regulations imposed on small financial institutions that are common in his district, like community banks and credit unions.
“Those are the financial institutions we have to strengthen and have to stand with as a priority, becuase I’ve heard reports that we have community banks closing their doors across the country one every month, I think is what was articulated to me,” Reed said. “Those credit unions did not cause the crisis of 2008 and they got saddled into this bucket of regulations that was created by Dodd-Frank.”
Financial reform advocates argue the Choice Act would leave the U.S. economy vulnerable to another financial crisis. They say it will make it easier for banks to make risky bets with investments. It would also remove the requirement that retirement advisers put their clients’ interests ahead of their own. The house bill also aims to scale back the authority of the Consumer Financial Protection Bureau, which was created under Dodd-Frank to regulate large banks and payday lenders, and is designed to operate as an independent watchdog with a single director. Reed said all the GOP bill doesn’t do anything other than bring the CFPB to fall into congressional oversight to help curb unnecessary costs.
“Right now that is an independent board that has no congressional oversight. They have proposed to spend millions on a Tag Mahal type of operation for their facility to serve these unelected, independent bureaucrats that are not subject to any congressional oversight, not even funding mechanisms. They put it into a mandatory bucket of spending,” Reed said. “So from my perspective, bringing under control in the reform body of congressional review and oversight is a positive development.”
The Senate has been working on a separate bill that is more focused on loosening regulations on community banks. It has yet to make it to the floor for a vote.