As much of the country probably noticed, it was a rather dramatic day on Capitol Hill yesterday. The former director of the FBI gave sworn testimony to the Senate Intelligence Committee, suggesting the president of the United States may have obstructed justice. The hearing generated quite a bit of attention, and for good reason: Donald Trump’s presidency is facing a genuine crisis.
But on the other side of Capitol Hill, House Republicans were only too pleased to take advantage of the fact that their latest moves unfolded far from the national spotlight.
The House of Representatives on Thursday approved a bill that would roll back key parts of the Dodd-Frank act aimed at Wall Street and financial industry regulatory reform which was passed in the wake of the mortgage meltdown.
The House voted 233-186 to approve the Financial CHOICE Act.
There was discussion in some circles last year that both parties are more or less the same when it comes to doing Wall Street’s bidding, but pay close attention to the roll call on yesterday’s vote: of the 234 House Republicans who voted on the bill, 233 (99.6%) of the GOP members voted for it. In contrast, of the 185 House Democrats who voted yesterday, literally all of them opposed the bill.
And what a bill it is. As regular readers may recall from our coverage a month ago, the point of this legislation is to gut most of the Wall Street reforms created in the wake of the 2008 crash. The Dodd-Frank law, which established a series of safeguards and layers of accountability, has drawn fierce opposition from Republicans and their allied lobbyists from the financial industry, and this bill is the vehicle GOP officials have embraced to roll back the clock. As the New York Times explained:
The Choice Act would exempt some financial institutions that meet capital and liquidity requirements from many of Dodd-Frank’s restrictions that limit risk taking. It would also replace Dodd-Frank’s method of dealing with large and failing financial institutions, known as the orderly liquidation authority — which critics say reinforces the idea that some banks are too big to fail — with a new bankruptcy code provision.
In addition, the legislation would weaken the powers of the Consumer Financial Protection Bureau. Under the proposed law, the president could fire the agency’s director at will and its oversight powers would be curbed.
The bill would also eliminate the Labor Department’s fiduciary rule, which requires brokers to act in the best interest of their clients when providing investment advice about retirement. The first parts of the rule are scheduled to go into effect on Friday.
Marcus Stanley, policy director for Americans for Financial Reform, recently told Vox, “It’s a little hard to get your mind around everything this bill does, because there’s almost no area of financial regulation it doesn’t touch. There’s a bunch of very radical stuff in this bill, and it goes way beyond repealing Dodd-Frank.”
For those who support existing safeguards for the financial industry, yesterday’s House vote was discouraging, but not grounds for panic. The bill now heads to the Senate, where it can be filibustered by the Democratic minority. The odds of the existing bill reaching Donald Trump’s desk are effectively zero.
But that doesn’t mean the House vote was unimportant. On the contrary, it was a reminder that for all the GOP’s talk about “populism,” when Republican leaders thought no one was looking, they passed a regressive bill, championed by Wall Street lobbyists, to gut the protections put in place after the 2008 crash.
A whole lot of vulnerable House Republicans voted for it yesterday – even knowing it faces impossible odds in the Senate – and it’s a safe bet there will be a few attack ads on the subject by the time the 2018 midterms come around.