House to vote next week on bill rolling back Dodd-Frank

The House of Representatives will vote next week on a sweeping bill to scale back much of the Dodd-Frank Wall Street Reform Act, the expansive banking regulations passed under President Obama after the financial crisis.

House Majority Leader Kevin McCarthy (R-Calif.) announced Friday that the chamber would vote on the Financial CHOICE Act next week after returning from Memorial Day recess. The House majority leader controls the floor schedule.

The CHOICE Act is an effort to undo much of Dodd-Frank, a law long panned by Republicans as a burden on the U.S. economy and businesses. The bill, sponsored by House Financial Services Committee Chairman Jeb Hensarling (R-Texas), passed that panel earlier this month with unanimous Republican support and unified Democratic opposition.

{mosads}“Hensarling and the Financial Services Committee have put forth a good bill that will revive our community banks by removing burdens that prevent lending, decreasing compliance costs, and improving their access to credit and capital,” McCarthy said in a statement announcing the vote.

“Growing our economy starts with growing our communities, and for generations local banks have led the way in community investment.”

Speaker Paul Ryan (R-Wis.) called the CHOICE Act “a jobs bill for Main Street” that would “rein in the overreach of Dodd-Frank that has allowed the big banks to get bigger while small businesses have been unable to get the loans they need to succeed.”

The CHOICE Act is almost certain to pass the full House along party lines after GOP leaders reached a deal to scrap a provision that would have repealed a controversial cap on fees charged to retailers by credit card companies. Democrats, who’ve long defended Dodd-Frank from Republican efforts to roll it back, are expected to oppose the bill unanimously.

But the bill is likely dead on arrival in the Senate, where lawmakers on the Banking Committee have shown more interest in a smaller bill focused on community bank relief than the House’s sweeping changes.

The CHOICE Act would allow banks to opt out of Dodd-Frank if they hold enough cash, and it would limit federal stress tests of major banks to every two years. The bill would remove the power through which the federal government can label a bank “too big to fail,” and disassemble it before it collapses and triggers another crisis. The bill would also replace Dodd-Frank’s Orderly Liquidation Authority with a special bankruptcy process that aims to insulate the financial markets from a failing bank’s fallout.

The House bill also makes substantial changes to the Consumer Financial Protection Bureau (CFPB), an agency created by Dodd-Frank that the GOP has long called unaccountable, abusive and redundant.

The bill renames the CFPB the Consumer Law Enforcement Agency and reduces its power to only enforcing pre-existing consumer protection laws. The agency’s sole director would be removable at will by the president, and its budget would be controlled by Congress through the traditional appropriations process.