Financial CHOICE Act Passes House

On June 8, 2017, the Financial CHOICE Act of 2017 (H.R. 10 – 115th Congress) passed the house with a 233-186 vote adhering to party lines (233 of voting 234 Republicans voted for the bill while all 185 voting Democrats voted against the bill).

H.R. 10 was introduced to Congress on April 26, 2017, sponsored by Representative and Chairman of the House Financial Services Committee Jeb Hensarling (R-TX). If the bill becomes law it would amend the Dodd-Frank Wall Street Reform and Consumer Protection Act, reversing many of its provisions. Congress.gov and the Congressional Research Service note that among other changes the bill would:

• Repeal Volcker Rule restrictions on certain speculative investments by banks;
• With respect to winding down failing banks, eliminate the Federal Deposit Insurance Corporation’s orderly liquidation authority and establish new provisions regarding financial institution bankruptcy;
• Repeal Durbin Amendment limitations on fees that may be charged to retailers for debit card processing;
• Allow certain banks to exempt themselves from specified regulatory standards if they maintain a certain ratio of capital to total assets and meet other specified requirements;
• Removes the Financial Stability Oversight Council’s authority to designate non-bank financial institutions and financial market utilities as “systemically important” (also known as “too big to fail;
• Convert the Consumer Financial Protection Bureau into a consumer law enforcement agency;
• Subject the agency to the congressional appropriations process, expanded judicial review, and additional congressional oversight;
• Eliminate supervisory authority over financial institutions; and
• Limit the agency’s authority to take action against entities for abusive practices.

The bill now moves on to the Senate where it is likely to face more of a challenge due to the Republicans’ narrower majority in the Senate and the Senate’s rule requiring 60 votes to invoke cloture and move forward with an up-or-down vote.

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