The US House of Representatives has voted through a Bill that would rescind many of the key banking reforms and regulations implemented after the 2008 financial crisis, although there is little chance that the Senate will pass this into legislation
The House has passed the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs Act, (CHOICE), which is regarded as a highly controversial measure designed to weaken the Dodd-Frank act.
Under the proposals, banks would no longer have to meet heightened regulatory requirements or conduct annual stress tests, and the activity of the federal agency the Consumer Financial Protection Bureau would be severely curtailed and its supervisory authority over financial institutions would be eliminated.
Certain banks would be able to exempt themselves from specified regulatory standards if they maintain a certain ratio of capital to total assets and meet other specified requirements.
The bill also removes the Financial Stability Oversight Council's authority to designate non-bank financial institutions and financial market utilities as ‘systemically important’ (also known as ‘too big to fail’).
Under current law, entities so designated are subject to additional regulatory restrictions. Designations made previously are retroactively repealed.
In addition, the Bill modifies provisions related to the Securities and Exchange Commission's (SEC) managerial structure and enforcement authority; eliminates the Office of Financial Research at the Department of the Treasury; and revises provisions related to capital formation, insurance regulation, civil penalties for securities laws violations, and community financial institutions.
While Republican speaker Paul Ryan supports the Bill, it has been strongly criticised by Democrats and some Republicans, and is viewed as highly unlikely to get through the Senate.
Details of the Financial CHOICE Act of 2017 are here
Report by Pat Sweet
