House Committee Approves Bill to Kill Dodd-Frank and Fiduciary Rule
The House Financial Services Committee passed H.R. 5983, the Financial CHOICE Act, on Tuesday in a 30-26 vote mostly along party lines. No Democrats voted for the bill, while one Republican, Rep. Bruce Poliquin (R- ME), voted against it. As reported by The DI Wire yesterday, the legislation includes a provision to repeal the Department of Labor’s fiduciary rule which redefines the fiduciary standard as it pertains to retirement investment advice.
The Republicans alternative to Dodd-Frank, which stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs, was sponsored by Committee chairman Jeb Hensarling (R-TX). The legislation purportedly seeks to end bailouts for big banks, toughen penalties for wrongdoing on Wall Street, promote economic growth, provide regulatory relief for small community banks and credit unions, while demanding greater accountability from Washington regulators.
“Democrats just voted against a bill that increases penalties against those who commit financial fraud. They just voted against a bill that ends taxpayer-funded bailouts, and they just voted against legislation that provides relief from Washington’s crushing regulatory burden for small banks, credit unions and consumers,” said Hensarling.
The bill also seeks to incorporate previously passed legislation, like H.R 1090 – the Retail Investor Protection Act, which attempted to repeal the fiduciary rule last October. The bill also demands cost-benefit analysis requirements for all financial regulators. Specifically, when proposing a rule, if its costs are determined to outweigh its benefits, the regulators will be prohibited from finalizing the rule absent an express authorization from Congress.
“We have heard from my friends on the other side of the isle contend that this is all somehow pro-Wall Street,” said Rep. Hensarling. “Well, I would ask the question…why is it after Dodd Frank are the big banks bigger? I would ask the question, why have heads of Wall Street banks called Dodd Frank a competitive advantage? Why has the New York Times and other media outlets reported that Wall Street opposes the Financial CHOICE Act and is now satisfied with Dodd-Frank. Why has the Wall Street Journal reported recently that 95 percent of the campaign contributions of the big banks have all gone to Hillary Clinton? Why does Dodd-Frank still pledge to bail out Wall Street Banks?”
Financial Services Committee ranking member Rep. Maxine Waters (D-CA) questioned the timing of the bill, particularly in light of the recent Wells Fargo scandal, where the financial giant was fined $185 million by the Consumer Financial Protection Bureau, U.S. Treasury Department and the city and county of Los Angeles for employees opening more than 2 million fraudulent deposit and credit card accounts in order to meet sales goals.
“I am more than disappointed. I am amazed that we are considering a highly partisan damaging piece of legislation to kill Dodd Frank and harm consumers…,” said Waters in her opening statement. “Just last week, we saw more than 2 million fraudulent accounts opened by Wells Fargo – enough for every resident in the state of New Mexico. Our chairman has uttered nothing about this major scandal….We sit here today with legislation that makes it even easier for executives to escape accountability to their shareholders. Indeed, we are debating legislation that takes us back to the summer of 2008.”
Organizations offering praise for the Financial CHOICE Act include the Independent Community Bankers of America, Heritage Action, Main Street Growth Project, Americans for Prosperity, Independent Bankers Association of Texas, Small Business Investor Alliance, Small Business & Entrepreneurship Council, Consumer Bankers Association, National Association of Realtors, Mid-Size Bank Coalition of America, Liberty Unyielding, FreedomWorks, U.S. Chamber of Commerce, National Taxpayers Union, National Association of Home Builders, and Red State.
