Bill to Replace Dodd-Frank and Kill DOL Fiduciary Rule Passes Key House Committee Vote
The House Financial Service Committee approved legislation on Thursday that seeks to repeal certain Dodd-Frank banking and securities regulations. The Financial CHOICE Act 2.0, introduced by Committee Chairman Jeb Hensarling (R-TX) last month, passed in a 34-26 vote, sending the bill to the full House for consideration.
Republicans maintain that the bill will end taxpayer-funded bailouts of large financial institutions; impose tougher penalties on those who commit financial fraud and insider trading; demand greater accountability from Washington regulators, and relieve well-capitalized banks from certain regulations.
The legislation also seeks to repeal the final DOL fiduciary rule and its related prohibited transaction exemptions. If the bill is passed, it would restrict the DOL from promulgating similar regulations until 60 days after the SEC issues its own fiduciary standards of conduct for broker-dealers and investment advisors.
Democrats fervently oppose the bill, dubbing it the Wrong Choice Act, and William Galvin, chief securities regulator for Massachusetts, called it “a gift to the investment industry and Wall Street special interests.”
If passed, the Dodd-Frank alternative will repeal the Volcker Rule and remove the authority of the Financial Stability Oversight Council to designate firms as systematically important financial institutions.
It will also change the name of the Consumer Financial Protection Agency to the “Consumer Law Enforcement Agency” and restructure the agency as an Executive Branch agency with a single director removable by the President at will.