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House Schedules Dodd-Frank Repeal for Floor Vote

Legislation failed to get floor vote in previous congress

Speaker Paul D. Ryan and his GOP caucus are ready to go on repealing the Dodd-Frank law. (Tom Williams/CQ Roll Call)
Speaker Paul D. Ryan and his GOP caucus are ready to go on repealing the Dodd-Frank law. (Tom Williams/CQ Roll Call)

A Republican plan to roll back the most expansive financial regulatory overhaul since the Depression is headed to a full vote in the House this week.

House Majority Leader Kevin McCarthy said Friday that he has scheduled debate and a floor vote on a bill that would repeal large parts of the 2010 Dodd-Frank financial overhaul. The law was enacted in the wake of the financial crisis and the recession and was meant to prevent the practices that led to the crisis.

House Speaker Paul D. Ryan, in a written statement, said Dodd-Frank “has allowed the big banks to get bigger while small businesses have been unable to get the loans they need to succeed.” The Wisconsin Republican called the legislation a “jobs bill for Main Street” that will end “the era of taxpayer-funded bailouts” and the designation of “too big to fail.”

House Financial Services Chairman Jeb Hensarling introduced the bill and shepherded it through his committee in early May in a party-line vote. The prospects for the measure in the Senate appear dim. Democrats are likely to have enough votes to block it.

Hensarling, a Texas Republican, offered a similar bill in the last Congress and moved it through committee, but House leaders didn’t give it a floor vote.

Republicans contend Dodd-Frank has stifled small-business growth and slowed the U.S. economic recovery. Democrats back the law as way to reduce global financial risk and curb behavior that led to the 2008 financial crisis. Democrats say repeal would eliminate financial protections for average Americans and let large banks engage in more risky business practices.

The Hensarling legislation would make a number of changes to bank and securities regulation, and restructure the internal operations of the Securities and Exchange Commission and other financial regulators.

The Congressional Budget Office said the bill could potentially cut the federal budget deficit by more than $24 billion over 10 years and reduce “direct spending” by $30.1 billion. It also said revenue would shrink by $5.9 billion.

Hensarling has touted the CBO score as affirming the GOP’s contention that the bill would eliminate “forever” the possibility of future large bank bailouts. But the CBO cautioned its estimates were subject to “considerable uncertainty,” depending on the probability that a systemically important financial institution, or SIFI, will fail.

The bill would repeal the Volcker rule, a provision that prohibits federally insured banks from making certain risky investments using their own funds; make it more difficult for public company shareholders to bring proposals to a vote at annual meetings; and repeal the Labor Department’s beleaguered fiduciary standard for broker-dealers.

It also would revamp the Consumer Financial Protection Bureau, making its director subject to removal at will by the president and putting Congress, rather than the Federal Reserve, in charge of its spending. It would also change its name to the Consumer Law Enforcement Agency.

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