The head of the U.S. House of Representatives' banking panel has unveiled the Republicans' most ambitious plan so far to loosen financial regulations, a 600-page bill to replace the Dodd-Frank financial reform law.
Representative Jeb Hensarling, who chairs the House Financial Services Committee, also set an April 26 hearing to discuss replacing the 2010 law.
"Republicans are eager to work with the president to end and replace the Dodd-Frank mistake with the Financial CHOICE Act because it holds Wall Street and Washington accountable, ends taxpayer-funded bank bailouts, and unleashes America’s economic potential," the Texas Republican said in a statement.
The blueprint of Hensarling's bill has been known for some time. He first introduced a similar measure in 2016, where it passed his committee but was not considered by the full House.
Representative Maxine Waters, the top Democrat on the committee, has dismissed Hensarling's bill.
“The new version, which is even worse than Chairman Hensarling’s first draft, cannot be allowed to become law. There is too much at stake for consumers and for our economy at large," she said in a statement earlier this month.
The 2010 Dodd-Frank law established strict rules on the financial sector to prevent a repeat of the 2008 financial crisis. Republicans like Hensarling, as well as President Donald Trump, believe the regulations put an undue burden on businesses and have held back the economy by restricting lending.
But Hensarling's ambitious approach, which would eliminate huge portions of Dodd-Frank, faces an uncertain political future beyond the House. At least eight Democrats would need to support a financial reform bill in the Senate for it to pass, and the major changes proposed by Hensarling are not expected by industry experts to garner that type of support.
Instead, the Senate is expected to take a slower, piecemeal approach to revisiting financial rules, with a focus on changes that could garner bipartisan support.
Hensarling's bill would make a host of changes to financial rules in the United States. For example, banks could significantly increase the amount of capital they hold, and in turn no longer have to adhere to a host of existing Dodd-Frank rules.
Hensarling's bill also severely restricts the power of the Consumer Financial Protection Bureau, while bringing it under much stricter oversight by Congress. The measure is likely to be met with strict opposition by Democrats in Congress.