Republicans’ alternative to President Obama’s 2010 financial reform law cleared a House panel Tuesday morning, advancing to the full House on a mostly party-line vote.
The vote in the House Financial Services Committee was 30-26. One Republican, Bruce Poliquin of Maine, voted against approving the legislation.
Democrats declined to offer any amendments to the measure, which would largely undo the new regulations imposed on banks if they chose to significantly increase their capital levels. Rep. Maxine Waters of California, the top Democrat on the committee, said the legislation was beyond fixing through amendments and that the vote was just “political theater.” With no amendments to vote on, the committee quickly voted the bill through.
A committee Republican staffer called the Democrats’ maneuver a “surrender,” noting that they passed up the opportunity to force Republicans to vote on specific parts of the bill that are controversial.
“They had opportunities to call for recorded votes on reinstating Glass-Steagall, on ‘breaking up the banks,’ on adding the Durbin amendment to the bill, on offering even tougher penalties against Wall Street, on every single financial services-related idea in their party’s platform during an election year and they choked,” the aide said.
In the lead-up to Tuesday’s vote, banking industry groups expressed guarded support for the overhaul. In particular, the banking industry favored one part of the package that would repeal a cap on fees for debit card transactions that was included in the 2010 Dodd-Frank law.
Because of that provision, however, retail and merchant groups, whose members pay the fees on those transactions, opposed the legislation.
But banking groups such as the American Bankers Association expressed skepticism about the higher capital requirements for banks, which would require many big banks to approximately double their capital levels. While that provision, which relies more on ownership stakes and less on borrowing, is thought to increase the stability of the financial system, bankers fear it would cut into their profits.
Committee Chairman Jeb Hensarling, of Texas, said the measure was meant to substitute “market discipline for government control” and that the legislation would end bailouts.
The legislative package will not make it into law, as it faces uncertain prospects on the House floor and would be vetoed by Obama. Nevertheless, it is meant to serve as a statement of Republican priorities should they take over the White House in 2017. Republican nominee Donald Trump has discussed the bill with Hensarling and has expressed support for repealing Dodd-Frank.
