A sweeping bill to pull back from regulations in the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed by an overwhelming majority in the Republican-led House of Representatives on Thursday.
The Financial CHOICE Act passed 233 to 186 along party lines, according to press reports, which also indicated that the bill is unlikely to pass the Senate.
The Association for Corporate Growth issued a PERT Alert detailing the legislation and its potential implications for private equity and the middle market.
The Hill, a Washington, D.C.-based paper, said the legislation was the “most ambitious Republican effort” to reverse the financial regulations implemented under President Obama’s administration following the 2008 financial crisis.
The legislation was sponsored by House Financial Services Committee Chairman Jeb Hensarling, a Texas Republican.
The Financial CHOICE Act would restrain oversight of several federal agencies that the 2010 Dodd-Frank Act expanded, including the Securities and Exchange Commission.
And while it is unlikely to become law, the legislation is viewed as an opening salvo in the current administration’s push to foster economic growth by loosening what Republicans and many business groups consider to be burdensome regulations.
“The House bill would unwind major parts of Dodd-Frank by relieving healthy banks of some regulatory requirements and forcing failing firms through bankruptcy rather than a liquidation process spearheaded by the regulators,” the Wall Street Journal reported. “It would subject new financial rules to cost-benefit analysis, boost penalties for financial wrongdoers, and repeal the Volcker rule restricting banks from speculative trading.”
The Trump administration issued a statement this week calling the bill “a necessary and important step in moving financial reform legislation through the Congress.”