WASHINGTON — A House panel vote on a GOP financial reform bill came to a sudden conclusion Tuesday, as Democrats declined to offer amendments to legislation they claimed was too flawed to address.
The bill was approved 30-26 by the House Financial Services Committee, mostly along party lines, with the exception of Rep. Bruce Poliquin, R-Maine, who joined Democrats in opposing the measure. (Poliquin is in a tough congressional race in a state that voted Democrat in the last two presidential elections.)
"This bill is so bad that it simply cannot be fixed … let's not waste any more time on this," said Rep. Maxine Waters, the top Democrat on the panel. "Democrats will not offer any amendments, and we move to dispense with this political theater."
Talking to reporters following the vote, Hensarling was critical of Democrats' decision not to offer any amendments during the vote, which had been expected to last at least two days.
"They had every opportunity to offer amendments and they didn't, so they basically just rolled over," Hensarling said. "I am just astounded that a bill that has been out there for two months — the Democrats couldn't figure out one amendment to offer."
The Financial Choice Act was first unveiled in June by Hensarling at the New York Economic Club and also presented to Republican presidential nominee Donald Trump during a meeting that same day. The bill's centerpiece is a measure that would allow banks an alternative regulatory framework, or "off-ramp," from Dodd-Frank requirements and Basel III capital rules in exchange for holding more capital.
But the bill also touches on hot-button issues, including a provision that would repeal Dodd-Frank's Durbin amendment, which capped interchange fees for debit cards, and another provision to reform the structure of the Consumer Financial Protection Bureau.
The timing of the vote was unfavorable for Hensarling, coming on the heels of a $190 million regulatory action against Wells Fargo last week. Regulators cited the bank after employees fraudulently opened accounts for customers in order to meet sales incentives. The CFPB helped levy the enforcement action, which was championed by Democrats.
"It is amazing that you guys on the other side of the aisle cannot even mention Wells Fargo and what is happening right before our eyes," said Waters, who called the legislation "a rushed, partisan messaging tool." She added, "Why anyone would want to … deregulate Wall Street is beyond me."
But Hensarling noted after the vote that his bill would give regulators the ability to assess higher penalties for financial crimes.
"The bill holds Wall Street accountable with the toughest, strongest, strictest penalties ever — far greater than those in Dodd-Frank. And as recent headlines attest, obviously stronger penalties are needed," Hensarling said in a statement. "Democrats just voted against a bill that increases penalties against those who commit financial fraud."
Repealing the Durbin amendment is also likely to prove a tough pill for lawmakers to swallow. The amendment to Dodd-Frank pitted two influential industries against each other in retail merchants and financial services firms.
After the vote, a committee Republican staffer called Democrats' decision to cut off debate and move to a vote "unimaginative," noting that they had an opportunity to try and add financial reform initiatives to the bill.
During the hearing, Rep. Joyce Beatty, D-Ohio, reiterated Democrats' defense of Dodd-Frank. "I believe this committee should be focusing on how to improve this economy through common-sense banking regulations and supervisions by building upon Dodd-Frank's success, correcting its shortcomings and refusing to settle for anything less," she said.
But talking to reporters, Hensarling said, "I am glad that they will continue to have to defend the indefensible Dodd-Frank," which, he said in his opening statement, has stymied economic growth.