WASHINGTON – Republican members of Congress said Wednesday they are optimistic that legislation to overhaul Dodd-Frank will be enacted, even though President Trump ignored the issue in his speech Tuesday night.
“House Republicans are listening and help is on the way,” House Financial Services Chairman Jeb Hensarling (R-Texas) told CUNA’s Governmental Affairs Conference. “It’s a new day in Washington.”
But Hensarling’s optimism was tempered by CUNA officials, who lamented the fact that Trump did not address the issue of financial regulatory reform during his speech before a joint session of Congress Tuesday night.
“How much did he talk about Dodd-Frank reform?” Ryan Donovan, CUNA’s chief advocacy officer, asked. “Not at all.”
He told GAC attendees, “What that tells us is that we have work to do.”
And a Democratic House member said she is not optimistic that Congress will be able to accomplish much.
“This is going to be a tough year to get anything done,” Rep. Linda Sanchez (D-Calif.) said.
Hensarling said he will shortly re-introduce the Financial CHOICE Act – a Dodd-Frank rewrite that he introduced last year.
Hensarling said the legislation would require regulators to tailor their regulations to the type of financial institution it regulates.
The chairman did not provide many details on how the new bill would change the CFPB.
However, Rep. Bill Huizenga (R-Mich.) said many Republicans will push for changes at the agency.
“I think you’ll see a long line of us taking a swing at that CFPB piñata,” he said.
House Financial Institutions and Consumer Credit Subcommittee Chairman Blaine Luetkemeyer (R-Mo.) said that Hensarling’s bill will “basically gut the agency.”
He said that Hensarling’s bill will retain a single director structure, unlike the bill he introduced last year, which created a commission.
He said that is a strategic move to foster negotiations on the bill when it reaches the Senate, which likely will want a commission.
“I think you’ll see a lot of support for a commission,” he said. A commission would be bipartisan, with both Democratic members and Republican members, he said.
Luetkemeyer also said Republicans will push a plan to place the CFPB under the appropriations process. He left open the possibility that Republicans might attempt to change the funding mechanism for the CFPB through the budget reconciliation process, which would short-circuit any attempt at a Senate filibuster. Reconciliation would require only 50 Senate votes for passage.
But Democrats emphasized the need to work with the CFPB.
Rep. Brad Sherman (D-Calif.) said he is confident CFPB Richard Cordray will increasingly tailor agency rules based on the size and type of financial institution being regulated.
Sherman said he recently addressed the issue with Cordray.
And he gave credit union officials some advice: “If you want to abolish the CFPB, talk to a Republican. If you want to influence the CFPB, talk to a Democrat.”
Sanchez said House Ways and Means Committee Chairman Kevin Brady (R-Texas) will introduce comprehensive tax reform legislation this year. She said she will fight to ensure that the credit union tax exemption is retained in any tax legislation.
And she said she hoped Brady will seek input from Democrats on that legislation.
“I know compromise has become a four-letter role here in Washington,” she said. “But it is necessary to getting anything done.”
