WASHINGTON (AP) – The US House of Representatives is moving toward softening a post-crisis law that brought the strictest rules for banks and Wall Street since the 1930s, more than six years after the financial crisis struck.
Under a veto threat from the White House, the bill pushed by the newly bulked-up Republican majority came under discussion in the House on Tuesday for the second time in less than a week. This time it’s likely to pass, with a vote expected Wednesday that would advance a Republican priority.
The bill would alter sections of the 2010 Dodd-Frank financial overhaul. Most notably, it would give US banks two extra years – until 2019 – to ensure that their holdings of certain complex and risky securities don’t put them out of compliance with a new banking rule.
In debate Tuesday night in a nearly empty House chamber, Democratic lawmakers denounced the move as a giveaway to the largest US banks, which hold the bulk of the securities in question.
Rep Maxine Waters of California, senior Democrat on the House Financial Services Committee, called it “this gift to a handful of the biggest Wall Street banks.”
The bill’s author, Rep. Michael Fitzpatrick insisted it makes “smart, technical reforms.” It would have the effect of “reining in out-of-control Washington regulators” and helping small businesses create jobs by reducing their compliance burden, Fitzpatrick said.
The Democrats also objected to the measure being whisked through the House in the first days of the new Congress without the chance for discussion or changes at the level of congressional committees. The Democrats were blocked late Monday from bringing about a dozen amendments to a vote on the floor.
Republicans insisted that because most of the provisions of the bill already had been voted on by the House in the last Congress as separate measures, ample opportunity was provided to consider them.
The bill would revise the so-called Volcker rule, a key part of the financial overhaul law, which would limit banks’ riskiest trading bets. That kind of risk-taking on Wall Street helped trigger the 2008 crisis.
The bill won a 276-146 majority in the House a week ago – only the second day of the new Congress – but failed under fast-track rules that required a two-thirds vote. This time it’s likely to pass under rules that require a simple majority.