WASHINGTON—In a vote along party lines, the House of Representatives has voted 233-186 to pass HR 10, the Financial CHOICE Act. The legislation is designed to replace much of Dodd-Frank, and includes provisions credit unions support and other provisions credit unions oppose.
The Financial CHOICE Act – introduced by House Financial Services Chairman Jeb Hensarling (R-TX) – includes provisions that would ease some mortgage rules, require a review of appropriate risk capital levels, rein in the CFPB's authorities and more. A credit union-supported provision to repeal the Durbin Amendment, however, has been pulled from the legislation. Credit unions also oppose provisions that would move NCUA’s budget under the congressional appropriations process.
Several analysts have said they do not expect companion legislation to pass in the Senate.
While Republicans and the credit union trade groups have lauded the legislation as a means to reducing regulations and costs, some Democrats have blasted the bill.
Rep. Nydia M. Velázquez (D-NY), released the following statement regarding what she dubbed the “Wrong CHOICE Act."
“In 2008, Main Street small businesses were victims of reckless gambles by corporate bad actors and lax government oversight," said Velázquez. "Small business capital markets froze up, making it difficult if not impossible to obtain affordable commercial loans. Small business bank lending plummeted by $116 billion between June of 2008 and 2011. Thousands of small businesses shed employees or shut their doors for good. Dodd-Frank implemented important protections to reduce systemic risk and prevent similar crises in the future. Not only has this landmark law protected consumers, but it has stabilized capital markets and small business credit has since rebounded robustly. By gutting this law, Republicans are demonstrating a case of ‘policymaking amnesia’, ignoring the painful lessons from 2008. Our Republican colleagues may have forgotten the 2008 financial crisis, but America’s small businesses certainly have not. They know the ‘Wrong CHOICE Act’ would set the stage for another financial collapse and endanger our nation’s prosperity. This bill should be rejected.”
The credit union trade groups, however, were supportive.
“We applaud the House of Representatives for passing the Financial CHOICE Act, and we appreciate Chairman Hensarling’s leadership on this issue,” said Jim Nussle, CUNA president/CEO, in a statement. “This bill represents a big win for credit unions and their members. And, as the debate moves to the Senate, we will continue to play offense to ensure Congress enacts common-sense legislation that improves the operating environment for credit unions to more fully serve their members.”
NAFCU CEO Dan Berger added, “NAFCU praises the passage of this important bill that, if enacted, would provide the credit union industry with much-needed regulatory relief. We appreciate members of the House and bill author Chairman Jeb Hensarling for recognizing the current regulatory burden facing credit unions, and look forward to working with the Senate to enact meaningful relief for our members."
Camden R. Fine, president of the Independent Community Bankers of America, issued a statement saying “Meaningful regulatory relief for the nation’s community bank is needed to improve lending and strengthen economic growth at the local level. While ICBA continues to have concerns with provisions of the bill that would alter the 10% concentration cap on deposits and liabilities at the nation’s largest financial institutions, we look forward to continuing to work with Congress to advance the Financial CHOICE Act and other regulatory relief measures that will help unleash the full economic power of the nation’s community banks.”