House Republicans aren’t done with financial regulatory relief bills.
The day after passing a significant rewrite of parts of the 2010 Dodd-Frank law, House Republicans introduced funding legislation for the next fiscal year that includes reforms to the Consumer Financial Protection Bureau, the regulatory agency that is the crown jewel of Dodd-Frank.
The fiscal year 2019 appropriations also includes a list of House Dodd-Frank reforms, many of which have bipartisan support, that were left out of the just-passed legislative package. Those include measures to revamp the Volcker rule that prohibits speculative trading by banks, to overhaul the “living wills” that banks are required to write, to change the bank stress tests, and more.
Representatives are effectively bidding to use the funding bill as a legislative vehicle for regulatory relief bills that were not included in the big bipartisan bill that just passed.
“The bill brings the rogue, unaccountable Consumer Financial Protection Bureau under the appropriations process, which will finally subject it to congressional oversight and accountability,” said Tom Graves, R-Ga., the chairman of the Appropriations subcommittee on financial services. “It also includes many significant financial reforms that slash harmful regulations and streamline outdated agency processes.”
Republicans have long sought to control CFPB funding through Congress. Today, the agency, responsible for regulating mortgages, credit cards, and other financial products, gets its funding through the Federal Reserve. Conservatives have argued that the agency escapes accountability by getting its funding apart from Congress, and the new funding bill would task Congress with appropriating money for the agency.
The bill would also allow the president to fire the CFPB director at will, give Congress new authority to influence its rules, and mandate that it have an independent inspector general.
Those measures, though, face slim odds of reaching enactment, as Senate Democrats have the ability to veto funding bills and oppose changes to the CFPB.
Other regulatory relief proposals in the bill, though, have better prospects because they have support from some Democrats.
One provision related to the Volcker Rule, written by Rep. French Hill, R-Ark., would make the Federal Reserve the sole authority for implementing the complicated rule meant to prevent banks with insured deposits from speculating for their own profit. Today, five agencies are responsible for writing the regulations, making it an extremely painstaking process to change it.
Another provision would give new protections to financial firms that the Financial Stability Oversight Council, the super-group of regulators created by Dodd-Frank, might consider risks to the economy and set up for added regulation.
A third would set new guidelines on the “living wills” that banks are required to file to regulators spelling out how they would safely go bankrupt without creating a crisis if they failed.
Those bills passed with bipartisan majorities.
