Senate Majority Leader Mitch McConnell said he’s pessimistic Congress will make major changes to the Dodd-Frank Act because he doubts Republicans can secure enough Democratic votes to pass legislation.
“I’d love to do something about Dodd-Frank, particularly with regard to community banks but that would require Democratic involvement,” Kentucky’s McConnell told Bloomberg News in an interview Tuesday. “I’m not optimistic.”
McConnell said the 2010 banking law, put in place after the financial crisis, has had unintended consequences that have hurt the nation’s smallest banks, a common refrain of Republican lawmakers.
Any effort to revamp Dodd-Frank would probably have to go through the Senate Banking Committee, which is led by Mike Crapo. While McConnell said he has discussed the law with Crapo, the Idaho Republican has indicated that there isn’t much Democratic interest in pursuing an overhaul.
“So far, my impression is the Democrats on the banking committee believe that Dodd-Frank is something akin to the Ten Commandments,” McConnell said.
Despite McConnell’s remarks, helping community lenders hasn’t been the main sticking point in negotiations between Republicans and Democrats. Ohio Senator Sherrod Brown, the banking panel’s top Democrat, has said he supports relaxing rules for the smallest banks.
But Democrats have been vocal in resisting any changes to Dodd-Frank that they say will aid Wall Street, such as scrapping Volcker Rule trading restrictions and weakening the Consumer Financial Protection Bureau.
Crapo has previously said efforts to revise Dodd-Frank would be slow as most major bills require 60 votes to pass the Senate, and Republicans hold just 52 seats. The House is moving faster, with that chamber’s Financial Services Committee approving legislation earlier this month that would alter many of the law’s key provisions.
House Speaker Paul Ryan has said he wants the legislation to move to a floor vote as soon as possible.
Absent action by Congress, McConnell said rolling back Dodd-Frank will fall to the Trump administration. After a slow start, President Donald Trump has made progress in recent weeks in filling the agencies that oversee Wall Street with his own appointees.
Trump, who has called Dodd-Frank a “disaster,” signed an executive order in February that required regulators to examine financial rules and issue a report on their findings. The Treasury Department is scheduled to release its review next month, kicking off what the administration has promised will be a broad rewrite of regulations implemented under Dodd-Frank.
Unless the situation in Congress changes, we will be “stuck with whatever the administration thinks it can do on its own to modify the impact of Dodd-Frank,” McConnell said.