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House Passes CHOICE Act to Scale Back Dodd-Frank, Reform CFPB

The House of Representatives on Thursday passed legislation that takes strong aim at the Dodd-Frank Wall Street Reform and Consumer Protection Act, essentially netting banks and financial institutions with a perceived win over regulators.

Drafted and supported by the House Financial Services Committee, the The Financial CHOICE Act — Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs — specifically targets several areas of the Dodd-Frank law, including ending big bank bailouts, enhanced penalties for fraud and deception on Wall Street, more accountability from financial regulators, and major changes to the structure and oversight power of the Consumer Financial Protection Bureau, among others.

The law, if passed by the Senate, would change the CFPB’s name to the “Consumer Law Enforcement Agency,” restructure the agency subject to congressional oversight and appropriations, eliminate its supervisory function, remove its “unfair, deceptive, or abusive acts and practices” authority, and repeal the Department of Labor’s Fiduciary Rule, in addition to other changes.

“Every promise of Dodd-Frank has been broken,” said Financial Services Committee Chairman Rep. Jeb Hensarling, a.Texas Republican, on Thursday. “Fortunately there is a better, smarter way. It’s called the Financial CHOICE Act. It stands for economic growth for all, but bank bailouts for none. We will end bank bailouts once and for all. We will replace bailouts with bankruptcy. We will replace economic stagnation with a growing, healthy economy,” he said.

Hensarling’s counterpart on the committee, ranking member Rep. Maxine Waters — a California Democrat — blasted the legislation during floor debate Thursday, dubbing the bill “the Wrong Choice Act” and “one of the worst bills I have seen in my time in Congress.”

“Donald Trump and Republicans want to open the door to another economic catastrophe like the Great Recession, and return us to a financial system where reckless and predatory practices harm our families and communities,” Waters said.

Written by Elizabeth Ecker