US House clears bill to retool CFPB, replace Wall Street reform law

Without any Democrats' support, House Republicans passed the Financial Choice Act on Thursday. "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".

Dubbed the Financial CHOICE Act and sponsored by House Financial Services Committee Chairman Jeb Hensarling, R-Texas, pundits say the legislation is nonetheless unlikely to move forward in the Senate, despite Thursday's high-profile vote. We're a small community bank and it puts us to more compliance issues. The bill passed today repeals "too big to fail, ' and makes taxpayer bailouts of Wall Street a thing of the past".

Changes to consumer protection agency: now, the Consumer Financial Protection Bureau (CFPB) exists as an independent agency. "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".

Dodd-Frank requires OTC transactions to be traded on regulated exchanges, much like stocks, and to be cleared in clearinghouses to limit excessive speculation in markets. "It stands for economic growth for all, but bank bailouts for none", he said. One Republican voted against the measure.

"The CHOICE Act allows Congress to clarify that regulatory agencies derive their powers from the legislative branch", said R Street Outreach Manager Clark Packard. The Choice Act would effectively dismantle CFPB, an agency that was tasked with policing deceitful financial practices in the aftermath of the Great Recession.

"Dodd-Frank regulations disproportionately burden small companies and prevent them from competing", said Hernando County Congressman Daniel Webster.

"Today's passage of the Financial CHOICE Act is a awful decision by the House of Representatives", left-leaning think tank Economic Policy Institute said of the vote.

Repeal Volcker Rule restrictions that keep banks from making risky bets with their own money and owning big stakes in hedge funds.

What does the Financial Choice Act do?

It now heads to the Senate where it has little chance of passing as Republicans will need votes from Democrats who say rolling back the Dodd-Frank law would soften regulations on the financial system. According to a 2017 report from S&P Global, the seven largest USA banks would have to collectively raise hundreds of billions of dollars in new equity to meet the new capital requirement and receive regulatory relief.

Sen. Mike Crapo, the Republican chairman of Senate panel with jurisdiction over banks, said lawmakers have requested ideas on how to improve the economy from all stakeholders and that "Dodd-Frank is clearly a part of that".

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