Republicans vote to gut post-2008 Wall Street reforms

But Democrats blasted the repeal for eliminating what they argue are vital checks that prevent the financial system from suffering another catastrophe.
By Josh Curlee | Jun 09, 2017
House Republicans voted Thursday to repeal and replace another key piece of Obama-era legislation: the 2010 Dodd-Frank law, which imposes controls on Wall Street transactions and increased oversight of U.S. banks. By a party-line vote of 233-186, they pushed through the CHOICE Act, a bill to eliminate many of the law's provisions.

The CHOICE Act's authors argue that Dodd-Frank hurts small banks, makes it too difficult for community banks to lend to small businesses, and puts too much responsibility on the federal government to bail out large financial institutions that fail. But Democrats blasted the repeal for eliminating what they argue are vital checks that prevent the financial system from suffering another catastrophe.

Dodd-Frank's provisions include increasing the minimum amount of capital that banks must have on reserve, and subjecting all banks that have more than $50 billion in reserve to annual "stress tests" to ensure that they will withstand future financial crises. Dodd-Frank also limits banks' trading activities and the fees they can charge for debit-card transactions.

The CHOICE Act does away with the restrictions on trading activities and disallows the government from expanded oversight over large financial institutions. It also restructures the Consumer Financial Protection Bureau, which the Obama administration had created to guard against predatory lending and other financial practices that harm consumers. The bureau will no longer maintain a customer-complaints database, for example.

And banks will have the option of following many of Dodd-Frank's provisions or not. The act does retain Dodd-Frank's limitations on debit-card fees, however.

Sen. Elizabeth Warren (D-Massachusetts) has threatened to filibuster the CHOICE Act. She played a lead role in the Consumer Financial Protection Bureau's creation.

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