House sends major bank bill to Trump, capping years of effort
The House on Tuesday sent a milestone bank deregulation bill to President Donald Trump for his signature, delivering a victory to lenders that spent years fighting to roll back rules enacted in the wake of the 2008 Wall Street meltdown.
The House passed the bill in a 258-159 vote with support from almost all Republicans but only 33 Democrats.
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The bill would rewrite some key parts of the 2010 Dodd-Frank law, a signature piece of Obama-era legislation that ratcheted up regulation of the banking industry in response to the financial crisis.
The bill’s opponents warned that the effort would put consumers in harm’s way and wasn’t necessary at a time when the industry is drumming up record profits. But a bipartisan group of lawmakers backing the bill argued that it would make it easier for banks to lend and would adjust regulations to fit the risks posed by lenders of various sizes.
“This is the most pro-growth banking bill in a generation,” said House Financial Services Chairman Jeb Hensarling (R-Texas), who helped lay the groundwork for the legislation.
While the rollbacks in the bill are significant, the legislative win for Trump falls short of pledges he had made to dismantle Dodd-Frank. They’re also smaller in scope than past Republican attempts to repeal parts of the law. Despite his support, Hensarling himself said, “I wish it did gut Dodd-Frank. It didn’t.”
“It turns out that taking a centrist approach — one that was derided by one side as milquetoast and the other as a gift to Wall Street — is the only way to get bipartisan legislation through Congress,” Capital Alpha Partners Director Ian Katz said.
The White House hopes to get the bill to Trump’s desk before Memorial Day, a senior administration official said, adding that there might be an announcement in the next couple of days about expediting the president’s signature.
The legislation was the product of years of negotiations between Senate Banking Chairman Mike Crapo (R-Idaho) and a small group of Senate Democrats who were willing to retool Dodd-Frank despite resistance from others in their party, who assailed the lawmakers for doing the bidding of the finance industry.
The core group of Democrats were Sens. Heidi Heitkamp (D-N.D.), Joe Donnelly (D-Ind.), Jon Tester (D-Mont.) and Mark Warner (D-Va.). All but Warner face tough reelection contests this year in states that Trump won in 2016. Asked if the Democrats would be invited to attend the bill’s signing ceremony, the White House official said invitations hadn’t been finalized.
The Senate legislation incorporated deregulatory proposals churned out over several years by the House Financial Services Committee under the leadership of Hensarling, who is retiring in January.
When the Senate passed the bill in March, Hensarling at first refused to take it up because he wanted more House priorities to be addressed. Senate Democrats refused to expand the legislation and threatened to kill it if Hensarling made changes.
As an alternative, Hensarling is now assembling a follow-up package, though it’s unclear if it will be able to attract sufficient backing from Democrats to clear the Senate’s 60-vote threshold.
The bill the House passed Tuesday would ease rules for a wide range of lenders.
The smallest banks would win relaxed mortgage regulations and streamlined capital requirements while escaping restrictions intended to discourage risky bets in bank trading. One of the most controversial elements in the legislation would shield small lenders from mortgage disclosure requirements intended to help fight discrimination.