The House Financial Services Committee advanced a package of 11 bills aimed at housing and financial regulators, many with broad bipartisan margins.
While some of the bills even passed unanimously, the discussion surrounding the measures showed there remains deep-seated concerns between the two parties about the Dodd-Frank financial reform law and how far to go in revisiting it.
{mosads}House Financial Services Committee Chairman Jeb Hensarling (R-Texas) billed the measures as providing critical relief to smaller banks and credit unions struggling under the weight of new financial regulations.
“It is not an exaggeration to say that community banks and credit unions are withering on the vine,” he said. “The sheer weight, volume, cost, complexity and uncertainty of federal regulation is a burden that is killing them off.”
He was also quick to note that these same bills passed his committee last Congress, with some passing the full House before stalling in the Democrat-controlled Senate.
GOP control of the upper chamber opens the door for renewed action on those measures. And while most Democrats on the panel were ready to back the measures again on Thursday, left-leaning lawmakers are wary that any momentum for modest changes to financial regulations could eventually snowball to broader changes that would loosen the leash on Wall Street.
Rep. Maxine Waters (Calif.) the top Democrat on the panel, voted in favor of many of the measures on the docket. But she opened the consideration of those bills by noting that while these bills are largely inoffensive, she takes issue with broader GOP efforts surrounding Dodd-Frank.
“A number of the measures … propose nominal changes related to the highly successful Consumer Financial Protection Bureau,” she said in her opening statement. “We want to be reasonable and work with the majority in a bipartisan manner on these measures. But again, it’s difficult to consider these technical changes to the CFPB when the Republican budget resolution on the floor this week would likely strip the bureau of its funding.”
The budget proposal passed Wednesday evening by House Republicans would subject the CFPB to the congressional appropriations process, giving lawmakers power to control how much money it receives. The agency currently receives its funding from the Federal Reserve.
When it comes to Dodd-Frank, there have been few signs of a partisan thaw over the 2010 measure. Democrats were incensed when provisions were attached to critical government funding and terrorism insurance bills that would step back portions of the law. And while the White House agreed to sign those measures with the provisions intact, President Obama has sought to reestablish a firewall on the law, vowing to veto any measures that would weaken the law.
On Wednesday, Sen. Sherrod Brown (Ohio) asked Treasury Secretary Jack Lew to weigh in on the House package. Brown, the top Democrat of the Senate Banking Committee, argued the bills would “roll back … consumer protections.”
Lew said the administration was open to finding common ground to improve the law, but any measures that “undermine the core provisions” would be rejected.
Among the bills approved the panel is one from Rep. Steve Stivers (R-Ohio) that would allow credit unions to apply for membership with the Federal Home Loan Banks.
Two other measures would tweak how mortgage rules are defined, while another would establish advisory committees at the CFPB.
One Democratic measure, from Rep. Brad Sherman (Calif.) would exempt small mortgage servicers from certain regulatory requirements.