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A U.S. Congressional banking panel is moving to advance legislation that would overhaul how the government regulates the financial sector, although it faces obstacles towards becoming law.
Representative Jeb Hensarling, who chairs the House Financial Services Committee, is considering amendments that would repeal large parts of the 2010 Dodd-Frank financial reform law.
After holding a hearing Wednesday to discuss the bill, the Financial CHOICE Act, the House panel is expected to vote on the bill in six days, according to a House aide.
But it’s unlikely that the package will garner support from congressional Democrats, who criticized the bill at the hearing as sowing the seeds for another financial crisis like the 2008 banking sector meltdown.
Representative Maxine Waters, the top Democrat on the committee, described the measure as “dead on arrival,” adding, “This bill must not become law.”
Given that at least eight Democrats would be needed to back Hensarling’s bill for it to pass the U.S. Senate, Wednesday’s hearing was an indication that the House plan may not clear both chambers of Congress and become law.
Democrats also said they planned to hold their own hearing to critique the bill, before the committee is expected to vote on it May 2.
Hensarling’s plan marks congressional Republicans’ first attempt to significantly roll back enhanced financial rules put in place after the 2008 crisis.
The bill would repeal significant portions of Dodd-Frank, including the “orderly liquidation authority” that permits regulators to step in and wind down a failing financial institution.
The bill would also impose new limits on the Consumer Financial Protection Bureau, restricting its regulatory and enforcement powers and give Congress the ability to set or cut its budget.
Representative Brad Sherman, a Democrat from California, estimated there were provisions of about a dozen bills buried in Hensarling’s proposal that had previously attracted bipartisan support.
Included among those ideas were bills that would ease new mortgage regulations to encourage easier access to home loans, and language that would exempt companies that sell manufactured housing like trailers from certain regulations.
(Reporting by Pete Schroeder)