President Donald Trump. (Photo: AP)

The Trump administration endorsed several provisions of House Financial Services Chairman Jeb Hensarling’s (R-Texas) Financial Choice Act on Tuesday, but made it clear that it considers the legislation as only the first step toward overhauling Dodd-Frank.

“The administration supports passage of the [the bill] as a necessary and important step in moving financial reform legislation through the Congress,” the Office of Management and Budget said, in a statement of administration policy.”

OMB continued, “Upon passage, the administration looks forward to working with the Senate on arriving at a final piece of legislation.”

The Treasury Department is expected shortly to issue its first set of recommendations on how to better regulate the financial system. Those recommendations, which were ordered by President Trump, will focus on community financial institutions.

Hensarling’s legislation, H.R. 10, is expected to go to the House floor on Thursday. The House Rules Committee, which sets the paratremeters for floor debate in the House, approved the rule governing the bill on Tuesday.

That rule, which must be passed by the House before debate on the bill starts, sets aside 90 minutes of general debate on the bill. The rule also makes in order six Republican amendments to the bill, but no Democratic amendments.

The bill would overhaul Dodd-Frank, making myriad of changes to the financial regulatory regime. It would diminish the powers of the CFPB, require congressional approval of significant agency rules and subject financial regulators, including the NCUA and the CFPB to the annual appropriations process.

Republicans argue that Dodd-Frank has restrained financial institutions, slowing economic growth. Democrats contend that Dodd-Frank instituted much-needed consumer protections following the economic crisis.

In its statement, the administration cited several provisions of H.R. 10 its supports, including proposals to:

  • allow well-capitalized banking organizations to opt out of certain regulatory requirements;
  • affirm the President’s authority to remove the Director of the Consumer Financial Protection Bureau (CFPB) at will;
  • subject the CFPB to the congressional appropriations process;
  • require broader use of cost-benefit analysis by financial regulators, and provide regulatory relief for community financial institutions.

The administration said in its statement that it will work with Congress to identify additional provisions of Dodd-Frank “that unnecessarily raise costs and limit choices for consumers.”