Three months ago, Rep. Jeb Hensarling (R-Texas), Chairman of the House Financial Services Committee, introduced the Financial CHOICE Act (Creating Hope and Opportunity for Investors, Consumers, and Entrepreneurs) Act—the GOP’s much-hyped alternative to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Now the time has come for the Committee to vote on whether to send CHOICE Act to the House floor. The Committee will meet on Tuesday, September 13, to debate the CHOICE Act, to consider possible amendments to the act, and to vote on the act.
Republicans have made various attempts to roll back portions of Dodd-Frank in the six years since the controversial financial reform law was passed, but the CHOICE Act is the most thorough legislation the GOP has proposed. Republicans have long argued that Dodd-Frank uses a “one size fits all” approach that was meant to come down on Wall Street but instead has had an adverse effect on Main Street
According to Hensarling, the CHOICE Act would provide regulatory relief for institutions that choose to remain strongly capitalized, imposes tougher penalties for those that commit financial fraud, and demands greater accountability from Washington regulators. The CHOICE Act also proposes sweeping reform to the Consumer Financial Protection Bureau (CFPB) that includes changing the Bureau’s name to the Consumer Financial Opportunity Commission, replacing its single director with a bipartisan, five-member commission, and establishing an independent, Senate-confirmed inspector general.
“It’s time for a new paradigm in banking, and capital markets,” Hensarling said. “It’s time to offer all Americans opportunities to raise their standards of living and achieve financial independence. In a phrase, we need economic growth for all and bank bailouts for none. There is a better way forward and it’s called the Financial CHOICE Act.”
The Democrats on the House Financial Services Committee disagree with Hensarling’s assessment.
“While the bill claims to end taxpayer bailouts, it would actually put us right back to where we were in 2008, when the largest banks had an implicit taxpayer guarantee,” said Rep. Maxine Waters (D-California), Ranking Member of the Committee. “Instead of spending so much time and energy trying to repeal Dodd-Frank, we should be building on its reforms and ensuring that our regulators can implement them effectively. That is the work this Committee should be focused on.”