Lawmakers’ efforts to chip away at the Dodd-Frank Wall Street Reform and Consumer Protection Act have come almost exclusively from the GOP side of the aisle—until now. This week, Democratic lawmakers pitched in to roll back Dodd-Frank, too.
The U.S. House of Representatives this week passed H.R. 4096 [1], a bipartisan bill sponsored by Reps. Michael Capuano (D-Massachusetts) and Steve Stivers (R-Ohio), by an overwhelmingly bipartisan vote of 395 to 3 [2]. The bill, known as the Investor Clarity and Bank Parity Act, amends Dodd-Frank’s Volcker Rule so that an investment adviser affiliated with a bank can share the same name or a similar name with a hedge fund or private equity fund.
The purpose of the bill is to ensure that Main Street businesses and banks have access to affordable financing and growth capital.
H.R. 4096 received 229 yea votes from Republicans and 166 yea votes from Democrats. The only three who voted nay were Democrats (Tulsi Gabbard, D-Hawaii; Jerrold Nadler, D-New York; and Jan Schakowsky, D-Illinois). Thirty-five representatives did not vote.
Attempts to roll back Dodd Frank have been more fierce recently, especially in the last month. Earlier in April, the House Financial Services Committee passed H.R. 1486 [3], known as the “Taking Account of Bureaucrats’ Spending Act of 2015,” aims to put the CFPB’s spending on a budget in an attempt to make the Bureau more accountable to taxpayers. The Committee also passed H.R. 4894 [4], which would repeal Dodd-Frank’s bailout fund for large, complex financial institutions. But both of those bills passed largely on party lines.
In late March [5], Dodd-Frank suffered a setback when a judge ordered the “systemically important” designation to be removed from insurance provider MetLife. The Financial Services Oversight Committee (FSOC), created by Dodd-Frank and comprised of the heads of nine federal government regulatory agencies and one independent member, designated MetLife as a nonbank systemically important institution in December 2014.
With H.R. 4096 bill having passed by such an overwhelming margin in the House, it will be interesting to see what happens when it is put to a vote in the Senate. Elizabeth Warren (D-Massachusetts) the main architect of the CFPB, a fierce Dodd-Frank supporter, and an ally of Capuano’s in the protest over Agency sales of delinquent mortgage loans to Wall Street investors, said in March [6]that “If Wall Street and their buddies in the Republican party want to launch an assault on financial regulations and they want to try to roll back Dodd-Frank, all I can say is, let’s have that fight. I’m ready. You can make it with words or anything else you want, but I am not backing down.”
Judging from the vote on H.R. 4096, it is not just Republicans that want to roll back Dodd-Frank now.