The Republicans are a step closer to scrapping off the Dodd-Frank Act. As promised in the polls, Republicans wish to do away the 2010 regulations. On Thursday, the House passed a regulation that will erase many financial regulations included in the Dodd-Frank. The senators and supporters of the ruling party aim to cut these laws, which they claim are strangling businesses. However, the road to the legislation becoming a law is long and full of hurdles. The Republicans do not hold a thumping majority in the Senate which could slim their chances of making it a law.
The bill received 233 to 186 votes, keeping the hope of the Republicans alive. Wall Street is not impressed with the legislation and remains pessimistic about the chances of the bill becoming a law. Known as the Financial Choice Act, the bill may not see daylight considering the current situation. Goodwin lawyer Matthew Dyckman said, “There is zero chance that the Choice Act survives.” The Democrats are equally unimpressed by the bill, blaming Republicans for putting retail investors to risk.
Trump’s Plan for Economic Change
Replacement of the Dodd-Frank regulations is not as publicized as the healthcare replacement bill and tax changes in the economy. However, this is one of the most important points in the Republican agenda. President Trump has called out the Dodd-Frank regulations before, suggesting that tight regulations are making businesses suffer. He marked that many of his own friends with legitimate businesses have failed to get credit because of the 2010 Act.
Speaker Paul D. Ryan said that Financial Choice Act is a ‘jobs bills’. He said, “It is why we were sent here, to look out for the people who work hard and do the right thing.”
What is the Fate of the Dodd-Frank Bill?
The bill was passed in the House with only Republican support. However, there are chances that some parts of the bill get bipartisan support as well. There are many new provisions in the Financial Choice Act like managing the large failing financial institutions. The banks which are considered too big to fail could come under the scrutiny of this new law as a new bankruptcy code provision comes into play.
The legislation could weaken the authority of the Consumer Financial Protection Bureau as well. The President will gain more power and control over the bureau, as he can now fire the director of the agency at will. The oversight powers of the agency could also be curbed.