The U.S. House of Representatives will vote next week on the Financial CHOICE ACT, which is the Republicans alternative to Dodd-Frank.
The Financial CHOICE Act (H.R. 10), sponsored by Rep. Jeb Hensarling (R-TX), has already gained approval from the House Financial Services Committee.
The Financial Choice Act would allow banks to opt out of Dodd-Frank upon holding enough cash and limits federal stress tests of major banks to every two years. It also removes the power of the government to label a bank “too big to fail,” and replaces Dodd-Frank’s Orderly Liquidation Authority with a bankruptcy process. Further, it changes the Consumer Financial Protection Bureau (CFPB) to the Consumer Law Enforcement Agency. The bill limits the agency’s power and mandates that its director is removable at will by the president. Its budget would be controlled by Congress.
“The Financial CHOICE Act offers economic opportunity for all and bank bailouts for none,” Hensarling said. “The era of ‘too big to fail’ will end and we will replace Dodd-Frank’s growth-strangling regulations on community banks and credit unions with reforms that expand access to capital so small businesses can create jobs and consumers have more choices and options when it comes to credit.”
The Congressional Budget Office (CBO) reports the Financial CHOICE Act would reduce the deficit by $24.1 billion over 10 years and that the bill’s regulatory relief would benefit community banks and credit unions. The nation’s largest banks would be unlikely to raise enough capital to meet the bill’s requirement for substantial regulatory relief, the CBO reported.
“This is a jobs bill for Main Street,” House Speaker Paul Ryan (R-WI) said. “It will rein in the overreach of Dodd-Frank that has allowed the big banks to get bigger while small businesses have been unable to get the loans they need to succeed. With the Financial CHOICE Act, the era of taxpayer-funded bailouts and too big to fail is over. Instead, we will put Main Street first to create more opportunities for people who work hard and do the right thing.”