After three days of raucous debate, the Financial Choice of 2017, the Republican bill to replace Dodd-Frank, passed the House Financial Services Committee by a 34-26 vote Thursday.
Heated debate ensued over the three-day markup, with Democrats vehemently opposing provisions of the bill that gut the Consumer Financial Protection Bureau, kill the Volcker rule, and repeal the Labor Department’s fiduciary rule so that the Securities and Exchange Commission can move first on a fiduciary rule.
Rep. Jeb Hensarling, R-Texas, said after the bill passed that Financial Creating Hope and Opportunity for American Investors, Consumers and Entrepreneurs Act “ends bailouts so Washington can never again pick taxpayers’ pockets and hand the money over to big banks. With the Financial Choice Act, the era of big bank bailouts and ‘too big to fail’ will be over. There will be bankruptcy for failed banks, not bailouts.”
Banks that qualify “for much-needed regulatory relief will be so well-capitalized that they pose no threat to taxpayers or the economy. Our plan replaces Dodd-Frank’s growth-strangling regulations on small banks and credit unions with reforms that expand access to capital so small businesses on Main Street can grow and create jobs,” Hensarling added.
Paul Schott Stevens, President and CEO of the Investment Company Institute, also applauded passage of the bill out of committee and urged Congress “to move ahead” with the Act’s “wide-reaching reforms” that fix “flawed aspects of the Dodd-Frank Act.”
The bill now moves to the full House.
ICI “strongly supports” the Choice Act provision that would remove the power of the Financial Stability Oversight Council to designate nonbank financial institutions as systemically important and of the Federal Reserve to regulate such institutions, Stevens said, “erasing the threat of wholly unnecessary and inappropriate bank-like regulation of registered funds.”
ICI has “long contended — in numerous comment letters to regulators both domestic and around the world — that registered funds do not present a threat to U.S. financial stability,” the mutual fund trade group said.
The bill also brings Sunshine Act transparency to “the FSOC’s processes and [diversifies] the participants in the Council’s deliberations, by including members of the represented agencies and not just the agencies’ heads.”
Financial Services Roundtable CEO Tim Pawlenty also applauded passage of the Act, stating that, regarding Labor’s fiduciary rule, “for the sake of clarity and transparency, the regulation and oversight of investment advisors, broker-dealers and others engaged in providing personalized investment advice about securities to retail investors should be the primary responsibility” of the SEC.
The SEC “has the expertise, knowledge and authority to most effectively and efficiently coordinate the myriad of applicable laws and regulations pertaining to such investment activities,” Pawlenty said.
What’s more, he added, “state insurance authorities should take the lead on the regulation of annuities and insurance products, including life insurance companies and their agents or distributors.”
— Check out Financial Choice Act Debate Zeros In on DOL Fiduciary Rule Repeal on ThinkAdvisor.