WASHINGTON — Republican Sen. Jim DeMint, a staunch opponent of the Dodd-Frank Act, is holding up two measures that the banking industry considers top priorities in an effort to force a symbolic vote on repealing the 2010 law.
One of the stymied measures would provide clear assurance to banks that when they hand over documents to the Consumer Financial Protection Bureau, they are not waiving any potential claims of privilege over those documents. The other bill would end a requirement that ATM owners maintain physical placards notifying users of fees.
The two measures have already passed the House, and they were recently combined into one Senate bill that is being co-sponsored by Sens. Tim Johnson and Richard Shelby, the top Democrat and Republican, respectively, on the Senate Banking Committee.
Earlier this month, Republican Sen. Bob Corker lifted his own hold on the CFPB bill, which increased the chances that the two measures would pass the Senate.
Industry lobbyists were hopeful that DeMint, who has a reputation for routinely holding up legislation, would follow Corker's lead and allow the bills to go forward. But so far that has not happened.
In exchange for lifting his hold, DeMint, R-S.C., wants a separate vote on whether to repeal Dodd-Frank.
"Dodd-Frank has formalized big financial institutions as unaccountable wards of the government, and its barrage of new and needless rules continues to suffocate our economic recovery," DeMint spokesman Wesley Denton said Monday in a statement
"It can't be fixed one piece at a time. We need to repeal Dodd-Frank to stop the harm it's doing to our economy."
It seems highly improbable that Senate Majority Leader Harry Reid, D-Nev., will cave in to DeMint's demand, despite the fact that Senate Democrats have enough votes to uphold Dodd-Frank.
The two smaller bills have nearly unanimous bipartisan support, so it would make little sense for Senate Democrats to give in to a Republican demand in order to assure the bills' passage.
The Senate could also get around DeMint's hold with a vote of 60 senators. But that would require a significant amount of the Senate's time, which also seems unlikely, given the narrow scope of the two bills that are being held up.
As a result, banking lobbyists are now hoping that DeMint will back down in the face of pressure from small banks in South Carolina that could benefit from the ATM bill.
The ATM measure is a response to a flurry of lawsuits over missing fee-disclosure signs. Industry representatives assert that the suits are often filed by people who have actually removed the placards, and note that if the law is changed, ATM users will still need to accept an onscreen notification of any fees being charged.
The CFPB bill is meant to fix what is widely seen as a drafting error in Dodd-Frank. When banks turn over information to other banking agencies, federal law makes clear that they are not waiving attorney-client privilege. But that is not is not true of the consumer agency.
The combined Senate legislation has 16 co-sponsors: 10 Democrats and six Republicans.