The House of Representatives just passed strong legislation cutting back the scope of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and most importantly, curbing the spectacularly corrupt CFPB. This law essentially provides a huge potential win for banks and financial institutions over regulators.
The bill was drafted and supported by the House Financial Services Committee. True to its nature, the government couldn’t help itself from adding an unnecessary name to the legislation, The Financial CHOICE Act — Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs. Really?! Corny name, but good intent. It specifically targets several areas of the Dodd-Frank law, including ending big bank bailouts, enhanced penalties for fraud and deception on Wall Street, more accountability from financial regulators, and major changes to the structure and oversight power of the Consumer Financial Protection Bureau, among others.
The law, if passed by the Senate, would change the CFPB’s name to the “Consumer Law Enforcement Agency.” The best part of the law is that it reins in the autonomous authority enjoyed by the CFPB since its inception by restructuring the agency and making it subject to congressional oversight and appropriations, eliminate its supervisory function, remove its “unfair, deceptive, or abusive acts and practices” authority, and repeal the Department of Labor’s Fiduciary Rule, in addition to other changes.
“Every promise of Dodd-Frank has been broken,” said Financial Services Committee Chairman Rep. Jeb Hensarling, a.Texas Republican, on Thursday. “Fortunately there is a better, smarter way. It’s called the Financial CHOICE Act. It stands for economic growth for all, but bank bailouts for none. We will end bank bailouts once and for all. We will replace bailouts with bankruptcy. We will replace economic stagnation with a growing, healthy economy,” he said.
Hensarling’s counterpart on the committee, ranking member Rep. Maxine Waters — a California Democrat — blasted the legislation during floor debate Thursday, dubbing the bill “the Wrong Choice Act” and “one of the worst bills I have seen in my time in Congress.”
“Donald Trump and Republicans want to open the door to another economic catastrophe like the Great Recession, and return us to a financial system where reckless and predatory practices harm our families and communities,” Waters said
