Democrats came out vehemently against the new U.S. Treasury report on the financial market that recommends gutting the Consumer Financial Protection Bureau and overhauling mortgage regulation.
The opposition comes as no surprise given U.S. Treasury Secretary Steven Mnuchin acknowledges the work Financial Service Committee Chair Jeb Hensarling, R-Texas, is doing in Congress to overhaul the Dodd-Frank Act.
Mnuhcin congratulated the House on passing the Financial CHOICE Act, H.R. 10, and mentioned working on a parallel track with Congress to provide swift relief.
Ever since Hensarling revealed the Financial CHOICE Act, Democrats have gone to battle to defend Dodd-Frank, especially the CFPB, urging others in Congress to support what they view as the No. 1 government entity standing up for the financial protection of consumers.
The comments from Democrats on the new Treasury report echo a lot of concerns they’ve already stated on that front, since both the report and the Financial CHOICE Act have similar missions to change the regulatory framework governing financial institutions.
And while Hensarling is working to execute this change in Congress, this report from Mnuchin is fulfilling an executive order issued by President Donald Trump, mandating that the Treasury examine financial regulations to determine if they satisfied a set of seven core principles.
Ranking Member of the Committee on Financial Services Maxine Waters, D-Calif., said, “Our nation’s economic security is in grave danger. The report released by Treasury is an attack on protections for consumers, investors and retirees. Make no mistake, the Treasury Department is proposing to take apart Wall Street Reform just like the Wrong Choice Act - they are just trying to make it sound nicer.”
“In some respects this plan is even more expansive in scope than the Wrong Choice Act, and hides harmful intentions behind generalities and platitudes,” she said.
Waters gave the example that the report proposes to rewrite the Community Reinvestment Act in an “ambiguous, undefined way that could lead to less investment in our communities.” She said it also instructs Congress “to take action to reduce regulatory fragmentation, overlap and duplication” without any concrete recommendations on how to do so.
And because the CFPB is once again a target in this report, much like the Financial CHOICE Act, Waters adamantly defended the importance of the bureau.
“In many areas, this plan is as brazen and openly regressive as the Wrong Choice Act. It too would destroy the Consumer Bureau, and roll back critical rules in place to ensure the stability of our financial system. The recommendations in this report must not be allowed to come to fruition,” said Waters.
On the Senate side, Sen. Sherrod Brown, D- Ohio, ranking member of the Senate Banking, Housing, and Urban Affairs Committee, said,” “When Wall Street greed goes unchecked, American taxpayers and working families pay the price. Too many hardworking Americans still haven’t fully recovered from the financial crisis, and Washington should be focused on protecting them by holding Wall Street accountable, not doing its bidding.”
Although the timeline of implementing any actual change in the Treasury report is likely to be at least one year away, the Financial CHOICE Act is currently in Brown’s court, the Senate.
Last Thursday, the House of Representatives voted to dismantle the Dodd-Frank Act. However, the act will likely struggle to succeed without more bipartisan support. A bill of this magnitude would need a filibuster-proof vote in the Senate, which is 60 votes or more, meaning Senate Democrats will need to flip sides and vote to support the Act.