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House GOP backs bill to undo much of Dodd-Frank


The bill passed 233-186, with no support from Democrats.

It also gives Congress oversight over the CFPB's budget, meaning lawmakers could defund the agency entirely, and bars the Federal Deposit Insurance Corp. from overseeing the living will process, which requires banks to write up plans on how they would safely be unwound in the event of a collapse.

"Today, House Republicans are pushing a risky Wall Street-first - Wall Street-first, that's who they are - bill that would drag us back to the days of the Great Recession", House Minority Leader Nancy Pelosi said at a press conference.

Critics of Dodd-Frank contend it stifled economic growth.

The overhaul bill targets the heart of the Dodd-Frank law's restrictions on banks by offering a trade-off: Banks could qualify for most of the regulatory relief in the bill so long as they meet a strict requirement for building capital to cover unexpected big losses.

Senate Republicans will have the choice of attracting eight Democrats to pass a comprehensive bill or else resorting to reconciliation for a more modest set of reforms with just a 51 vote majority. "For the goal of making the financial system safer, hyou can do a lot more of that with less complex and less burdensome regulation", said Kim Schoenholtz, director of the Center for Global Economy and Business at NYU Stern.

The act restructures the Consumer Financial Protection Bureau, created to guard against fraud in lending.

House financial services committee chairman Jeb Hensarling officially introduced the act in April, but a series of Democratic amendments and other delays were raised before the final vote was taken.

"This legislation comes to the rescue of Main Street America", said House Speaker Paul Ryan (R-Wis.) during a press conference Wednesday morning.

However, it has faced withering criticism from Democrats and some Republicans and few provisions seem likely to survive the Senate.

The bill passed Thursday would eliminate the CFPB's supervisory and rule-writing roles, effectively reducing it to an enforcement agency. The Financial Creating Hope and Opportunity for Investors, Consumers and Entrpreneurs Act aims to curb the amount of regulation banks dealing in derivatives will face and cut back stress testing.

Rep. Walter Jones of North Carolina was the only Republican to vote against the bill.

Thursday's vote was largely split along party lines, a sign of the contentious nature of the debate over post-economic crisis financial regulations. "While repealing this portion of Dodd-Frank won't do away with each state's self-procurement tax statutes, it will take the federal government out of the equation, which is always helpful".

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