Republicans pass banking bill, Knight touts small business impact

Xavier Trudeau
Juin 17, 2017

But the GOP will run into obstacles in the Senate, because Republicans in the upper chamber don't have the 60 votes needed to pass the legislation. In the coming days, the Treasury Department is expected to release a report that will add to the push by laying out recommendations for cutting back what Republicans see as red tape that was wrapped around banks after the 2008 crash.

Dubbed the Financial Choice Act, the bill is the centerpiece of Republican promises to scrap regulations on the finance industry. "Overly burdensome regulations were placed on community banks and credit unions, and without the resources to stay in compliance, small financial institutions have closed their doors while big banks are getting even bigger". "The financial crisis exposed a broken regulatory system allowing Wall Street to gamble with Main Street's future".

According to Knight and other Republicans in favor of the new bill, Dodd-Frank, one of President Barack Obama's famed reforms, was harmful to economic growth and job creation. "This is the wrong Choice Act".

"Washington bureaucrats should never pick winners and losers, but that's exactly what Dodd-Frank did", said a statement from Gibbs.

On Thursday, while the country (and the world) watched ousted Federal Bureau of Investigation director James Comey call President Donald Trump a liar with whom he did not want to be left alone, the Republican-controlled House of Representatives quietly rolled back financial regulations meant to prevent a repeat of the 2008 financial crash which led to the Great Recession. They have expressed concern that an inadequately regulated financial sector could lead to risky decisions similar to what contributed to the financial crisis.

Considerable reforms to the structure and power of the Consumer Financial Protection Bureau (the "CFPB").

"We're losing a small bank or credit union a day and they're not dying of natural causes", Hensarling said. That's the landmark banking law created to prevent meltdowns like the 2008 economic crisis. The Choice Act would also allow financial institutions to get exemptions from requirements that test how banks would weather a financial downturn.

Despite the bill's passage in the House, the prospects that it will become law are dim.

Authored by House Financial Services chairman Jeb Hensarling of Texas, the bill has little chance of survival in the Senate, where the support of at least some Democrats would be required. "Here's the bottom line: Donald Trump and Republicans want to open the door to another economic catastrophe like the Great Recession and return us to a financial system where reckless and predatory practices harm our families and communities".

"It is bad for consumers, it is bad for investors, and it's bad for the stability of the American economy - which is bad for all of us", said Lisa Donner, executive director of Americans for Financial Reform. Changes to Dodd-Frank will also need approval from posts in the Fed, FDIC, and Comptroller of the Currency, however, CNN reported, and many of those posts have not been filled.

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