A new House Republican bill to fund the government includes key parts of the GOP Dodd-Frank replacement package the House passed this month, giving lawmakers another opportunity to try to put deregulatory legislation on President Trump's desk.
The fiscal 2018 financial services appropriations bill introduced by the House Appropriations Committee Wednesday would extend Congress' control of the Consumer Financial Protection Bureau and prevent it from regulating payday lenders, among other measures.
The bill also would repeal the Volcker Rule that prevents banks from speculating with insured deposits and eliminate regulators' new power to regulate non-banks that they think could pose a threat to the financial system.
In releasing the bill, Rep. Tom Graves of Georgia, the chairman of the financial services subcommittee, said he was "particularly excited about the financial reforms, which slash harmful regulations, streamline outdated agency processes, and rein in the rogue Consumer Financial Protection Bureau."
While the bill would accomplish some of the big goals that the GOP has set out to achieve in terms of rolling back the financial rules enacted under former President Barack Obama, it is far from becoming law. Congress has not determined how it is likely to fund the government for fiscal 2018, and government funding legislation would require the sign-off of Senate Democrats, many of whom oppose most changes to the 2010 Dodd-Frank law.
Republicans have criticized the Consumer Financial Protection Bureau for lacking accountability and blamed it for driving up the cost of the credit products and services it regulates. The bureau is funded by the Federal Reserve, which earns money on its book of government bonds. The legislation introduced Wednesday would require the bureau to be funded through the regular appropriations process, giving Congress more of a say in its operation. Additionally, it would scale back the agency's authority to police markets and supervise banks.
Other financial regulators that receive their funding from other agencies or industries also would be brought into the appropriations process, including the Federal Reserve for its regulatory role.
Those measures were included in the Financial Choice Act, a broad legislative package that passed the House in June meant to replace Dodd-Frank. The bill is not expected to pass the Senate because of the Democratic filibuster.
The banking industry this month called on Congress to advance reforms to the CFPB using must-pass government funding bills.
Wall Street critics immediately objected to the bill introduced Wednesday. "This funding bill is nothing more than a repackaged version of the giveaways to Wall Street and predatory lenders that the House majority approved last month," said Brian Marshall, policy counsel at Americans for Financial Reform, a group that backs stricter financial regulation. "It would gut the Consumer Financial Protection Bureau, enable reckless behavior by big banks, and hand a special favor to payday lenders."