The House Financial Services Committee Tuesday approved H.R. 5983, Chairman Jeb Hensarling’s plan to overhaul the Dodd-Frank Act and the rest of the financial regulatory regime after Democrats moved to shut off debate, saying the bill was so wrongheaded that they didn’t want to try to amend it.
The bill now goes to the House floor, although it is not expected to be considered by the Senate this year. The Senate does not have a companion bill and given the short amount of time that Congress is expected to be in session for the rest of the year, it would be virtually impossible to move such controversial legislation through the process.
Even if that did occur, it’s expected that President Obama would veto it, since Democrats are very vocal about their opposition to the bill.
“This bill is so bad that it can’t be fixed,” Committee ranking Democrat Rep. Maxine Waters (D-Calif.), as she made a motion to report the bill out of committee.
“So let’s not waste any more time on this,” she added. “Democrats will not offer any amendments, and we move to dispense with this political theater.”
The move appeared to catch Republicans by surprise, with Hensarling recessing the committee before reconvening and reporting the bill, 30-26. The markup of the 512-page legislation lasted took a little more than two hours.
The bill would expand the NCUA board to five members and make the agency’s budget subject to the appropriations process. It also contains several provisions to rein in the CFPB.
The legislation would provide regulatory relief for banks and credit unions meeting an asset level of 10%. CUNA President/CEO Jim Nussle said earlier this summer that about 65% of credit unions would be eligible for that regulatory relief.
Nussle said that while CUNA supports some of the plan’s provisions, he believes that Hensarling’s proposal provides more regulatory relief for banks than it does for credit unions.
In a letter to the committee in advance of Tuesday’s markup, Carrie Hunt, NAFCU’s executive vice president of government affairs and general counsel, said that regulatory burden is the major challenge facing credit unions. She said that NAFCU supports many of the bill’s provisions, but said the association is concerned about several items, such as plans to expand the membership of the NCUA board and make the agency’s budget subject to the annual appropriations process.
In his opening statement at the markup, Hensarling said the bill offers “true consumer protections so that our consumer agency will enforce the law and not actually make it up.”
He added that the bill provides regulatory relief for community financial institutions. “They are withering on the vine as we continue to lose a community financial institution a day, and as we do, the hopes and dreams of countless Americans who count on those financial institutions to fund their American Dreams,” he added.
In her opening statement, Waters said that the repeal of Dodd-Frank would not help consumers. “Nearly all the rules we enacted to make banks safer and stronger would be repealed, and replaced by a phony choose-your-own regulatory regime that puts the banks in the driver’s seat,” she said.
