The House of Representatives passed legislation Thursday that could preview Republican efforts next year to undo or modify President Obama’s landmark post-crisis financial reform legislation.
The bill authored by Rep. Blaine Luetkemeyer, R-Mo., to lessen the regulatory load on many midsize and regional banks received some support from 20 Democrats, and cleared the lower chamber in a 254-161 vote.
Luetkemeyer’s legislation would change the framework imposed by the 2010 Dodd-Frank law for identifying banks that require extra regulation. Under current law, any bank with over $50 billion in assets falls into that category.
The legislation would make it so that only the eight largest U.S. banks would automatically qualify for greater oversight. Other banks would only qualify for added regulation if they were identified as threats to the system by a super-group of regulators set up by the Dodd-Frank law, a time-consuming and uncertain process.
Separately, Republicans have introduced legislation to overhaul that group and limit its powers.
Republicans have criticized the Dodd-Frank law as something that hurts small and regional banks with unnecessary, burdensome regulations. Thursday’s deregulatory measure received the backing of several finance industry groups and the U.S. Chamber of Commerce.
The Obama White House issued a veto threat for the bill, and said it would “severely weaken” the post-crisis reforms. Its prospects would likely be better, though, in a Trump administration.
On the House floor Thursday, Democrats criticized the measure by noting President-elect Trump’s choice for treasury secretary, Steven Mnuchin, is on the board of one of the banks that would get regulatory relief under the bill: CIT Group, a bank holding company with $66 billion in assets.
“I suppose passing this legislation is just the Republican Congress’ way of giving [Mnuchin] a ‘signing bonus’ for coming into government,” said Maxine Waters, D-Calif., the ranking Democrat on the House Financial Services committee.
Waters also warned that the bill would be just the first attempt by the GOP to undo Dodd-Frank. Jeb Hensarling, the Republican chairman of the committee, responded that she “ain’t seen nothing yet.”
