House Speaker Paul Ryan said Friday that a Republican bill to replace President Obama’s bank rules headed to the House floor next week will end bailouts and “too-big-to-fail” banks.
“It will rein in the overreach of Dodd-Frank that has allowed the big banks to get bigger while small businesses have been unable to get the loans they need to succeed,” Ryan, R-Wis., said in a statement, referring to the 2010 Dodd-Frank financial reform law that increased regulation and oversight of the financial sector. “With the Financial CHOICE Act, the era of taxpayer-funded bailouts and too big to fail is over.”
House Majority Leader Kevin McCarthy officially announced Friday that the House would vote next week on the sweeping legislation, named the CHOICE Act because it would offer banks extra relief from the new rules if they chose to maintain higher levels of capital.
The bill, authored by House Financial Services Committee chairman Jeb Hensarling of Texas, cleared the Committee earlier in May. But the timing for it to hit the floor was delayed over a debate among Republicans over a provision undoing regulation of debt card swipe fees that pitted banks versus retailers.
With that measure excised, the bill is set to clear the House with Republican votes. It is not expected to be able to pass the Senate, where Republicans must contend with a Democratic filibuster.
Nevertheless, the legislation provides a Republican view of how financial markets should be overseen, with fewer rules and limitations on the authorities of regulators.
McCarthy, R-Calif., advertised it as a boon to community banks, not Wall Street. It is “a good bill that will revive our community banks by removing burdens that prevent lending, decreasing compliance costs, and improving their access to credit and capital,” he said.
Republicans have sought to cast their legislation as relief for community banks as Democrats have argued that they are doing the work of Wall Street and inviting higher risks of another financial crisis.
Both sides will have another opportunity to debate the causes of the financial crisis and the proper government response in debate on the House floor next week. House Republicans have argued that the government helped generate the financial crisis by incentivizing too many home loans, in large part through the government-sponsored enterprises Fannie Mae and Freddie Mac. Democrats blame the crash on irresponsible behavior by big banks that were insufficiently regulated.