Dodd-Frank Faces New Challenge from House Republicans
A less powerful CFPB and looser caps on card interchange fees: Those are among the potential features of a bill that Chairman of the House Financial Services Committee Jeb Hensarling (R-Texas) plans to introduce later this month that would overturn major provisions of the Dodd-Frank act.
In promoting his Financial Choice Act this week, Rep. Hensarling said “Dodd-Frank has failed” and “it’s time for a new legislative paradigm in banking and capital markets.” He said his bill also would boost penalties for financial fraud and enable banks that raise large amounts of capital to be exempt from certain liquidity and regulatory requirements.
Congressional Republicans have long been hostile to the financial reform law passed in the wake of the 2008 financial crisis, saying it imposes too many rules and costs on financial firms and results in limited services for consumers. But according to various reports, there is little chance the new bill will gain much traction until after the November election and the seating of a new Congress and president.
Opponents are lining up against Hensarling’s proposal. Among them is the National Retail Federation. The merchant trade group said the Financial Choice Act would “reinstitute price fixing by card companies,” threatening small business owners, slowing hiring and expansions, and generally acting as a brake on the larger economy.
“Protecting bank profit margins at the expense of competition is not sound public policy and it will harm merchants and consumers,” said Mallory Duncan, the NRF’s senior vice president and general counsel. “On behalf of retailers and their customers, NRF will fight for free and open markets.”
- Lew: Treasury, Administration Wary of Dodd-Frank Changes
- Senate Banking Chair Proposes Dodd-Frank Overhaul
- Four Years Later: Dodd-Frank Still Divides the House; Effects Being Felt by Prepaid