A House panel approved legislation Thursday that would gut much of the Dodd-Frank law enacted after the 2008 economic meltdown. The bill cleared the Republican-led House Financial Services Committee on a party-line vote of 34-26.
“I can’t do a good James Brown, but I feel good,” said Rep. Jeb Hensarling, the normally reserved Republican chairman of the committee, referring to the singer often called the godfather of soul. Hensarling wrote much of the overhaul legislation.
Republicans argued that the law passed under President Barack Obama is slowing economic growth because of the cost of compliance and by curbing lending.
Democrats warned the GOP bill will create the same conditions that led to the financial crisis and pushed the economy to the brink of collapse.
The bill now goes to the full House for a vote, but supporters admit that the path will be much more difficult in the Senate, where Democratic support will be needed.
In a fast-moving session following two days of laborious debate, the panel flew through a series of votes on amendments, as the majority Republicans easily beat back Democrats’ attempts to reshape and soften the legislation. The action moved House Republicans closer to realizing their long-promised goal to undo financial regulatory laws enacted under Obama after the 2008 economic meltdown pushed the economy to the brink of collapse.
The bill would repeal about 40 provisions of the Dodd-Frank Act. Banks could qualify for much of the regulatory relief in the bill so long as they meet a strict basic requirement for building capital to cover unexpected big losses.
Republicans argued that big banks have done well under Dodd-Frank, but that community banks and credit unions are struggling to keep up with the regulatory burdens imposed by the law.
“This economy is poised to take off, but it’s not going to take off as long as Dodd-Frank in its current form remains on the book,” Hensarling said. “It’s important that we get tax reform done. It’s important we get health care reform done, but it’s also important we pass the Financial Choice Act passed.”
While the measure is expected to pass the full House, in the Senate, it will need 60 votes to become reality, meaning the GOP will need several Democrats to join their effort. Leaders of the Senate panel with jurisdiction over a Dodd-Frank overhaul have said they would like to work together to find areas of common agreement to enhance economic growth.
Such agreement was nonexistent during the House hearings this week. Instead, the hearings turned into a contentious debate over Democratic efforts to cast a spotlight on President Donald Trump’s business empire and his refusal to release his tax returns.