The Financial Services Committee passed the Financial CHOICE Act, H.R. 10, on Thursday in a 34-26 vote after three days of marking up the bill.
House Financial Services Committee Chairman Jeb Hensarling, R-TX, first introduced the act last year in attempts to replace the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Then, after growing calls to replace Dodd-Frank this year under the new Trump Administration, including an executive order from President Donald Trump to beginning rolling the act back, Hensarling released an updated version of the act, dubbed the Financial CHOICE Act 2.0, on April 19.
The only hearing on the bill was met with a lot of opposition from committee Democrats, who ended up using a political work around to schedule a follow-up hearing in order to voice their disproval of the “Wrong Choice Act.”
Democrats then took the fight a step further, delaying the scheduled mark up on Tuesday for more than three hours by forcing committee staff to begin reading aloud the 591-page bill.
But despite all the political theatre, the CHOICE passed out of the committee on Thursday and is headed to the full House of Representatives.
“The Financial CHOICE Act ends bailouts so Washington can never again pick taxpayers’ pockets and hand the money over to big banks,” said Hensarling in a press statement after the act passed through the committee.
“With the Financial CHOICE Act, the era of big bank bailouts and ‘too big to fail’ will be over. There will be bankruptcy for failed banks, not bailouts. And banks that qualify for much-needed regulatory relief will be so well-capitalized that they pose no threat to taxpayers or the economy,” he continued. “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.”
Reaction to the act passing through the committee from industry trade associations and groups matched the extreme divide seen by Republicans and Democrats during the hearing and mark up.
National Association of Federally-Insured Credit Unions President and CEO Dan Berger applauded the announcement, stating, "Passage of the Financial CHOICE Act is an important step toward creating a regulatory environment where the nation's credit unions can thrive.”
"NAFCU supports many provisions of this bill, but one of the most significant is the repeal of the failed Durbin interchange amendment,” said Berger. “We urge lawmakers to see this bill through, including the repeal of this government interference that harms consumers."
The Credit Union National Association shared similar sentiments, noting, “It’s good news that we’re seeing regulatory relief legislation move forward, and the Credit Union National Association will continue our engagement with policymakers and staff as the process continues," said CUNA President and CEO Jim Nussle.
“During the markup, several committee members specifically cited the negative effects that overly broad rules stemming from the Consumer Financial Protection Bureau have had on credit unions and their members, so our message is getting out there,” Nussle stated.
The Financial Services Roundtable, which represents integrated financial services companies, supported the news and noted that it’s an important first step to improving the regulatory system and promoting economic growth.
“Improvements to financial regulations can lead to economic growth, while still protecting taxpayers and consumers,” said FSR CEO Tim Pawlenty. “We thank the Committee for its leadership in driving the regulatory reform debate forward and look forward to working with policymakers to craft a regulatory reform system that unlocks more economic opportunity for all Americans.”
The Center for Responsible Lending stands in stark opposition to the previous comments and believes the act is an extreme bill that would shred essential consumer protections enacted in the wake of the financial crisis through Dodd-Frank.
“It is clear that payday lenders and other legal loan sharks are on the march in Congress and with the Administration. These actions represent a push to expand debt traps and abusive practices by financial predators,” Center for Responsible Lending Executive Vice President Debbie Goldstein said. “If they succeed, people will lose billions of dollars to the tricks and traps of predatory lenders and our economy will suffer. People must continue to urge their Congressmembers to push back against these harmful moves.”
Similarly, Lauren Saunders, associate director of the National Consumer Law Center, said, “This bad bill is the wrong choice for consumers, including veterans, workers, and elders.”
“The Wrong Choice Act gives corporate wrongdoers a get-out-of-jail-free card and guts the CFPB, the consumer watchdog that holds Wall Street accountable for the types of malfeasance that led to the Great Recession,” said Saunders.