WASHINGTON (AP) — The Republican-led House approved sweeping legislation Thursday to undo much of former President Barack Obama’s landmark banking law created after the 2008 economic crisis that caused millions of Americans to lose their jobs and homes.
The largely party-line vote was 233-186, as Republicans argued the rules designed to prevent another meltdown were making it harder for community banks to lend and hampered the economy. No Democratic lawmakers supported the measure; only one Republican opposed it.
“Our community banks are in trouble,” said Speaker Paul Ryan, R-Wis. “They are being crushed by the costly rules imposed on them by the Dodd-Frank Act. This law may have had good intentions but its consequences have been dire for Main Street.”
House passage was widely expected, but the Republican overhaul of the 2010 Dodd-Frank law is unlikely to clear the Senate in its current form. Senators have said they’ll spend the next few months trying to find common ground on legislation designed to boost the economy. Potential areas for compromise include changes to how much capital banks must maintain and decreasing the paperwork burden for small lenders.
President Donald Trump had said he wants to do “a big number” on Dodd-Frank, and the House vote marks progress toward that goal.
A new memo about future plans reportedly from House Financial Services Committee Chairman Rep. Jeb Hensarling, R-Texas, reveals an even more aggressive version of the Financial CHOICE Act, the Republican-led effort to repeal and replace Dodd-Frank, with the Consumer Financial Protection Bureau facing some of the most drastic changes, according to an article in CNBC by Ylan Mui.
The article stated that the memo shows Hensarling is strengthening his attack on the CFPB and scaling back regulations on bank living wills and stress tests in new legislation, which is expected to be introduced soon.
As one might expect, the reactions to President Donald Trump’s initiation of the overhaul of the Dodd-Frank Wall Street Reform Act came in fast and furious after Trump signed an executive order on Friday that calls for the Secretary of the Department of the Treasury to begin reviewing Dodd-Frank.
And unsurprisingly, those reactions varied wildly, with left-leaning people and organizations calling the move an outrage and other assorted adjectives, and those that lean right having the polar opposite reaction.
Crooks and Liars:
Donald Trump held a meeting with business leaders Friday morning and told the world that he’s going to gut Dodd/Frank because his best buddies can’t get business loans.
Trump praised JP Morgan’s CEO Jamie Dimon, a member of his economic advisory board, during the meeting and then set his sights on Dodd-Frank, the Wall Street Reform and Consumer Protection Act.
Trump talked about cutting taxes and then said, “…and to do what we have to do in terms of regulation. We have some of the bankers here, there’s nobody better to tell me about Dodd/Frank than Jamie.”
He continued, “We expect to cut a lot out of Dodd/Frank because frankly I have so many people, friends of mine, who have nice businesses, they can’t borrow money because the banks just won’t let them borrow because of rules and regulations and Dodd/Frank, so we’ll be talking about that in terms of the banking industry.”
Chief among those is the “dismantling” of the Dodd-Frank Wall Street Reform Act.
During the presidential transition, Trump’s transition team stated that dismantling Dodd-Frank would be one of the president’s main priorities.
And on Thursday, the American public got a reminder that the president and his party plan to keep that promise.
Speaking before the Congressional Republican Retreat, Vice President Mike Pence said that dismantling Dodd-Frank and its “overbearing mandates” remains a top priority for the Trump administration, a statement that was greeted by applause from the collected Republicans.
(To see Pence’s speech in full, click here. To see the Dodd-Frank section of the speech, fast-forward to the 18:01 mark.)
After Trump and Pence spoke to the GOP retreat, House Financial Services Committee Chairman Rep. Jeb Hensarling, R-Texas, issued a statement saying that he intends to continue pushing for the replacement of Dodd-Frank with a new financial reform package.
Morgan Stanley CEO James Gorman defended Dodd-Frank in an interview with CNBC on Thursday, weighing in on the uncertain future of the act under the incoming Trump administration.
“Let me be very clear about this, I am not a fan of getting rid of Dodd-Frank,” Stanley told CNBC.
However, he continued, “There are elements of Dodd-Frank that clearly need to be curtailed.”
Shortly after winning the election, President-elect Donald Trump’s transition teamposted his plans for the first days in office, which included his plan to “dismantle” the Dodd-Frank Wall Street Reform Act.
The website calls Dodd-Frank a “sprawling and complex piece of legislation that has unleashed hundreds of new rules and several new bureaucratic agencies,” including theConsumer Financial Protection Bureau.
Not too long after Trump’s team announced their plans, Trump’s U.S. Treasury Secretary nominee Steve Mnuchin also gave his thoughts on the Dodd-Frank Wall Street Reform Act in an interview with CNBC.
During the interview, Mnuchin said, “The No. 1 problem with Dodd-Frank is it is way too complicated and it cuts back lending.”
“We want to strip back parts of Dodd-Frank that prevent banks from lending and that will be the No. 1 priority on the regulatory side,” he told CNBC.
President-elect Donald Trump named the newest addition to his team on Wednesday, announcing billionaire investor Carl Icahn as a special advisor on issues relating to regulatory reform.
According to Trump’s press announcement, “Icahn will be advising the president in his individual capacity and will not be serving as a federal employee or a special government employee and will not have any specific duties.”
Although the release is vague on any specific regulations, an article on CNBC by Jacob Pramuk cited a previous interview between Icahn and CNBC after Trump’s win in November when Icahn said “he is ‘not against regulation,’ as he would not want to repeal Dodd-Frank.”
But he said that “you can’t let the regulators start running the country.”
The statement is in stark contrast to the plans Trump has already announced on dismantling Dodd-Frank.