The House passed the Financial Choice Act Thursday to eliminate Dodd-Frank, a massive set of banking regulations that were instituted in the aftermath of the 2008 financial crisis. The bill, sponsored by House Financial Services Committee Chairman Jeb Hensarling (R-Texas,) passed on a near party-line vote.
“Dodd-Frank represents the greatest regulatory burden on our economy, more so than all the other Obama-era regulations combined,” Hensarling told reporters Wednesday. “There is a better way: economic growth for all; bank bailouts for none.”
Republicans argue that regulations under Dodd-Frank have throttled the banking industry and made it difficult for small business and individuals to receive loans. The Choice Act would repeal the Volcker Rule and reduce the role of the Consumer Financial Protection Bureau. Created under Dodd-Frank as a banking watchdog, the CFPB operates under a single director, which Hensarling argues is undemocratic.
“To think in a democracy that one unelected individual can functionally decide what credit cards go in our wallets, what mortgages we can have on our home, whether or not we even have a checking account. I mean, that’s just anathema to me to the founding principles of this republic,” Hensarling said while speaking last month at the American Enterprise Institute.
Democrats acknowledge problems with Dodd-Frank but are not supportive of Hensarling’s legislation, which despite its passage in the House, has little hope of being taken up in the Senate.
“The Wrong Choice Act is a vehicle for Donald Trump’s agenda to get rid of financial regulation and help out Wall Street. It’s an invitation for another Great Recession, or worse,” said top Democrat on the House Financial Services Committee Rep. Maxine Waters (D-Calif.)