Major rules proposed by financial regulators, such as the NCUA, would have to be approved by Congress before they could take effect, according to a draft of the Financial Services Chairman’s Financial CHOICE Act released Wednesday.
The draft, totaling almost 600 pages, includes that provision, which also is found in legislation the House passed earlier this year.
The Financial Services Committee will hold a hearing on the bill on April 26. Witnesses for that hearing have not been announced.
Hensarling’s bill would overhaul Dodd-Frank, decreasing the powers of the CFPB, which would be transformed into a law enforcement agency.
“Republicans are eager to work with the President to end and replace the Dodd-Frank mistake with the Financial CHOICE Act because it holds Wall Street and Washington accountable, ends taxpayer-funded bank bailouts, and unleashes America’s economic potential,” Hensarling said, in releasing the bill.
House Democrats already have panned the measure, saying that it removes many of the safeguards built into Dodd-Frank.
While Hensarling appears prepared to move the bill through the House with only Republican votes, Senate Banking Chairman Mike Crapo (R-Id.) and the committee’s ranking Democrat Sherrod Brown (D-Ohio) ,are attempting to craft a bipartisan measure.
Included in the latest draft of Hensarling’s bill are provisions that would:
- Make financial regulators, including the NCUA and the CFPB, subject to the annual appropriations process;
- Re-name the CFPB to the Consumer Law Enforcement Agency, with all supervisory powers being removed from agency authority;
- Require financial regulatory agencies to conduct increased analyses, including a cost-benefit analysis, before issuing a rule;
- Prohibit the CFPB from issuing final rules regulating payday lending and mandatory arbitration agreements.
As previously reported, the bill would retain the current three-member NCUA board structure. The revamped CFPB would continue to be run by one person.
Credit union trade groups were guarded in their comments about Hensarling’s draft.
“While no bill of this size and complexity is perfect, the legislation includes a number of provisions that we believe would reduce credit unions’ regulatory burden allowing them to more fully provide their members with safe and affordable financial services,” said CUNA President/CEO Jim Nussle. “We are encouraged that the chairman intends to take the legislation through the Financial Services Committee, and we look forward to seeing this process progress.”
“NAFCU is gratified to see work getting underway on some much-needed regulatory relief for the nation’s credit unions,” said NAFCU President/CEO B. Dan Berger. “Credit unions continue to strain under the regulatory compliance burdens of the Dodd-Frank Act, and we thank Chairman Hensarling for his recognition of this burden and his leadership in launching a discussion of important reforms.”
Support and opposition to Hensarling’s bill already are breaking down along ideological lines.
“The Financial CHOICE Act is all about giving companies more choices on how to rip off American consumers, investors, homeowners, and taxpayers,” said Joe Valenti, director of consumer finance at the liberal Center for American Progress, a liberal think tank and the co-author of an analysis of the bill. “It’s another gift to the same actors whose predatory practices caused the crisis and cost nearly 10 million families their homes.”
On the other side of the political spectrum, Grover Norquist, president of the conservative Americans for Tax Reform, praised the measure.
“The Financial CHOICE Act looks to deliver reforms that will replace the misguided regulatory burdens imposed on America’s financial consumers and small financial institutions by the Obama Administration,” Norquist said.
