Democrats are on “high alert” for Republican attempts to attach language rolling back financial reform rules in must-pass government legislation, top Democrats said Wednesday.
“I think we’re on high alert against efforts to have something jammed in at the last second,” Sen. Jeff Merkley of Oregon said on a call with reporters.
Chuck Schumer, the New York senator expected to lead the Democratic caucus after 2016, said, “Democrats are standing arm-in-arm to protect” the 2010 Dodd-Frank financial reform law, predicting that Republicans would not be able to peel off Democratic votes for deregulatory measures attached to government funding legislation.
“Any attempts by Republicans to hold government funding hostage until they roll back consumer protections will be faced with a united Senate Democratic caucus that will not relent,” he said, referring to the Consumer Financial Protection Bureau.
Schumer’s prediction is likely to be tested in the weeks ahead.
The financial industry, warning of damaging burdens imposed on banks by the new rules, is looking to obtain regulatory relief during the series of fiscal deadlines that Congress will face starting with the end of the government’s year Sept. 30.
The main legislative vehicle is a broad reform bill authored by Sen. Richard Shelby, R-Ala., chairman of the Banking Committee. Shelby passed his bill through the committee earlier in the year, but failed to garner any Democratic support. He then successfully attached it to a financial services appropriation bill.
Shelby’s legislation, however, does not address the Consumer Financial Protection Bureau. Other Republicans have sought to place the bureau’s funding under congressional authority or replacing its single director with a five-member commission. Both measures would make the agency more responsive to businesses, in the industry’s view.
The Shelby bill, however, would accomplish one goal shared by both Republicans and Democrats, namely lifting the burden of paperwork and regulatory compliance on small community banks that do not individually present a potential threat to the financial system.
Treasury Deputy Secretary Sarah Bloom Raskin said on the call Wednesday that there is “very strong support for the underlying goal of community bank relief.”
Nevertheless, “the vehicle for doing this is not the appropriations process,” she said, calling instead for any changes to go through a “full, open, bipartisan vetting.”
Merkley agreed, saying that any community bank relief should pass through the Senate Banking Committee, of which he is a member.
While Merkley and other liberals, including high-profile financial regulation proponent Sen. Elizabeth Warren of Massachusetts, have indicated fierce opposition to significant changes to new financial rules, the financial industry hopes that more moderate members of the Democratic caucus might vote for tweaks included in a broader bill.
