The House passed a bill Thursday that would repeal significant parts of Dodd-Frank and make substantial changes to the Consumer Protection Financial Bureau.
Republicans argued the CHOICE Act — which passed along party lines in an 233-186 vote — is to help save community banks drowning under the regulations implemented under the 2010 landmark Wall Street reform bill.
House Republican Conference Chair Cathy McMorris Rodgers noted a substantial amount of community banks and credit unions have closed since Dodd-Frank took effect, adding she believes it has had a negative impact on small businesses and farmers who might not be eligible for a loan from larger banks.
“When you consider that on average we have lost one community bank every day since Dodd-Frank was put into effect, you’ve seen where the big banks have just gotten larger, and unfortunately we’ve lost too many community banks that are a part of keeping Main Street strong and creating jobs,” she told The Daily Caller News Foundation.
GOP Rep. Claudia Tenney of New York, a member of the House Financial Services Committee, said while Dodd-Frank was designed to prevent another too big to fail situation, it has exasperated the problem.
“I used to be a small-town bank attorney representing a number community banks and we have two left in our community,” she told TheDCNF. “They’ve all been wrapped up or swallowed up by the big guys who have been protected by Dodd-Frank.”
Tenney argued while huge banks can afford the regulatory burden, small banks can’t afford the compliance costs.
Georgia Rep. Barry Loudermilk echoed Tenney’s sentiments, noting one of the fastest growing jobs in the banking industry is compliance specialists.
“The big players can afford to have all these compliance specialists, you’re small players can’t,” he told TheDCNF. “And so what Dodd-Frank did is actually put us on the path to accelerate another financial crisis.”
Republicans said the changes to the CFPB are necessary, arguing the agency has been ineffective and should be run by government appointees.
“Well, I think that this is all part of accountability, and at the end of the day, it is the elected representatives of the people that should be making these decisions. Dodd-Frank and the Consumer Protection Bureau — a lot of these regulations that have the force of law but are not at the end debated or approved by the lawmakers,” Republican Conference Chair Cathy McMorris Rodgers told TheDCNF.
While Republicans applauded the bill’s passage, Democrats argued it was removing necessary safeguards to protect the country from another financial crisis.
“Today, with one vote, House Republicans have wiped away a decade’s worth of progress and, in their wake, left behind middle-class families,” House Democratic Caucus Chairman Joseph Crowley said in a statement. “There’s no doubt more work is needed to bolster our economy and expand opportunities for hardworking Americans, but Republicans have yet to offer such a vision. Instead, they have embraced a bill that will put America at risk of another recession.”
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