It also would weaken the powers of the Consumer Financial Protection Bureau. Under the proposed law, the president could fire the agency’s director at will.
Republicans hailed the committee vote as a win for financial institutions. “Our plan replaces Dodd-Frank’s growth-strangling regulations on small banks and credit unions with reforms that expand access to capital so small businesses on Main Street can grow and create jobs,” said Representative Jeb Hensarling, Republican of Texas and chairman of the House Financial Services Committee.
After a long markup section, the nearly 600-page bill passed, 34 to 26. The 19 amendments Democrats offered were rejected.
They assailed the legislation as a giveaway to the banks. “The Wrong Choice Act is a deeply misguided measure that would bring harm to consumers, investors and our whole economy,” said Representative Maxine Waters of California, the ranking Democrat on the committee. “The bill is rotten to the core and incredibly divisive,” she said. “It’s also dead on arrival in the Senate, and has no chance of becoming law.”
Progressive groups argued that the push to unravel Dodd-Frank was at odds with Mr. Trump’s populist campaign message that the economy was rigged in favor of corporate interests.
“It is an enormous package of gifts for Wall Street and the worst actors in finance,” said Lisa Donner, executive director of Americans for Financial Reform, who said the bill House Republicans passed would increase the likelihood of another financial crisis.
The banking industry’s top lobbyist, Rob Nichols, president of the American Bankers Association, cheered the committee’s vote. “The thousands of pages of new regulations facing banks have become a tremendous driver of decisions to sell or merge,” he said. “Given the cost of complying with all the new rules, some community banks are having to choose between meeting those regulatory requirements and meeting the financial needs of their individual and business customers.”
The Trump administration has been using executive directives to throttle Dodd-Frank while it waits for Congress to act. Last month, President Trump issued a memorandum asking Steven Mnuchin, the Treasury secretary, to review the Orderly Liquidation Authority, a tool created by Dodd-Frank for unwinding financial institutions that are on the verge of collapse. Mr. Trump also asked the Treasury to review the Financial Stability Oversight Council, which designates financial institutions as “systemically important,” better known as too big to fail. It requires them to hold more capital in reserve in the event of financial emergencies.
Mr. Mnuchin said at a Milken Institute conference in California this week that financial deregulation was one of his priorities. He assured the bankers in the audience that they would be pleased with his efforts.
“You should all thank me for your bank stocks doing better,” Mr. Mnuchin said.
Continue reading the main story