The Chairman of the Senate Banking Committee said any repeal of Dodd-Frank will require bi-partisan support when it reaches the Senate.
“We will have a strong grounding from which to build a common-sense financial regulation reform process in America,” said Mike Crapo, senator for Idaho and Chairman of the Senate Banking Committee. “My goal this Congress is to work in a bipartisan manner with members of the Senate Banking Committee, the administration, with [House Financial Services Committee] Chairman [Jeb] Hensarling [Republican from the State of Texas] and with the regulators to strike a smart balance with thoughtful regulation that promotes economic growth.”
Crapo made the remarks at the Financial Industry Regulatory Authority (FINRA) Conference in Washington D.C.
As The Industry Spread has previously noted, the Financial Choice Act – a sweeping repeal of Dodd-Frank – passed out of Hensarling’s committee earlier this month, but it passed in a party-line vote: meaning all the Republicans on the committee supported it while all the Democrats opposed it.
It hasn’t yet made it to the full House of Representatives for a vote, but should do so before the end of the month.
The bill is expected to pass as the Republicans currently hold a 238–193 edge.
The Uncertain Future of Dodd-Frank
The repeal of Dodd-Frank faces a much tougher road in the Senate.
While Republican senators hold a 52–48 edge, the threat of a filibuster looms large.
Any repeal will begin in Crapo’s Senate Banking Committee. If it passes out of committee, Democrats could – and probably will – attempt to filibuster, unless a bi-partisan deal is reached.
Any bi-partisan agreement in the Senate will likely look much different than the Financial Choice Act, which has eliminated the Democrats’ sacred cows: the Volcker Rule and the Consumer Financial Protection Bureau. As such, the next step would be for the bill to be “reconciled”.
A group of Senators and Representatives – more than likely chosen by Crapo and Hensarling – would meet behind closed doors to hammer out one bill that would receive enough votes to pass both chambers.
For any bill to become law, an exact copy of the bill must pass in both chambers, and then be sent to President Trump for signing. If just one word is different, the bills would continue to be reconciled before the exact same bill is passed in both chambers.
Dodd-Frank and the Trump Agenda
Passage of any financial regulatory reform appears far more difficult today than it did just one hundred days ago. President Donald Trump came in with a far reaching agenda that included tax reform, health care reform, border security, and the repeal of Dodd-Frank. But he’s found delivering on his promises far more difficult than making them. Health care reform has largely stalled as has tax reform – the New York Times recently reported that tax reform will not happen in 2017, and he’s been unable to get funding for his border wall.
The repeal of Dodd-Frank has been less of a priority for Trump than these other issues.
Now, the President is facing a series of scandals with allegations that he attempted to stop an FBI investigation into Mike Flynn, Trump’s initial choice as his National Security Advisor, and another allegation that he shared top-secret information, possibly originating from an Israeli spy embedded with ISIS, with the Russians.
The scandals have a growing number of Democrats and even some Republicans already suggesting impeachment or his removal from office.
With his presidency in jeopardy, President Trump may no longer have the political capital to convince enough legislators to sign off on the sweeping repeal of Dodd-Frank.
Dodd-Frank and the Obama Legacy
Besides the Affordable Care Act, Dodd-Frank was the biggest and most significant legislative achievement of the Obama presidency.
President Trump won the presidency vowing to destroy the Obama legacy, including repealing both the Affordable Care Act and Dodd-Frank.
Most Democrats feel a duty to protect Obama’s legacy and are likely to fight tooth and nail to prevent either of the bills from being repealed; this is a major reason why the Financial Choice Act passed in a party-line vote. Any bi-partisan agreement on Dodd-Frank will have to overcome that dynamic.