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Bipartisan Bill to Fix Dodd-Frank “Mistake” Passes the House The House passed bipartisan legislation on Thursday to better gauge and more accurately reflect the potential risks that financial institutions could pose to the economy. H.R. 6392, the Systemic Risk Designation Improvement Act, replaces an arbitrary threshold included in the Dodd-Frank Act that regulators are using to designate so-called systemically important financial institutions. The House voted to approve the bill with a bipartisan vote of 254-161. “The heated debate on the House floor foreshadows the fight that is likely to shape up into a battle next year as President-elect Donald Trump enters the White House and Republicans take control of the Senate, giving them leadership of both houses of Congress,” the Wall Street Journal reported in its coverage of the bill’s passage. Barney Frank, the former congressman who is the co-author of the Dodd-Frank Act, admitted in testimony before the House Financial Services Committee in 2014 that the threshold he wrote into law is “arbitrary” and expressed support for adjusting it. He also later called the threshold a “mistake.” “So what we’re trying to do here today with this bipartisan bill is try to provide a solution, try to fix a genuinely recognized mistake in Dodd-Frank. And what those who oppose this bill are trying to do is to preserve that mistake in the law,” said Financial Services Committee Chairman Jeb Hensarling (R-TX). Rep. Blaine Luetkemeyer, the sponsor of the bill who serves as Chairman of the Housing and Insurance Subcommittee, said the bill “would protect U.S. taxpayers from actual risk posed to the financial system. Decisions on what institutions are deemed systemically important should be based not on size alone, but also on activity and other factors that actually demonstrate systemic risk.” Responding to criticism of the bill from Ranking Member Maxine Waters (D-CA), “Hensarling took the floor after Waters finished speaking and said, ‘If the ranking member believes this is the first act in getting rid of Dodd-Frank, she ain’t seen nothing yet,’” Bloomberg BNA reported. MEMBER SPOTLIGHT “A new administration gives us a chance to actually end ‘Too Big to Fail’ and provide consumers with more access to credit.” Weekend Must Reads Wall Street Journal | Consumer Financial Protection Rewrite Republicans who are about to run the federal government face some crucial strategic questions, and one is how much of President Obama’s agenda to roll back through regulation and how much through legislation. A case in point is the Consumer Financial Protection Bureau, which has abused the law and whose structure was recently found unconstitutional. Washington Examiner | Nix last-minute rulemaking As current polls and election exit polls showed, President Obama is almost as popular now as he has been in seven years. Even so, the election results, both for president and for Congress, showed that voters don't want his policies anymore. Obama certainly has no mandate to make any major changes on his way out the door. AAF | Dodd-Frank’s Future When the Trump transition team announced the new president’s choice to be Secretary of the Treasury, he immediately put Dodd-Frank squarely at the center of the policy agenda. That is good news, indeed.
Wednesday, December 7 at 10:00 A.M. Thursday, December 8 at 9:30 A.M.
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