WASHINGTON – The House Financial Services Committee will vote on a bill Tuesday that has been touted as a Dodd-Frank alternative and will likely set the marker for financial reform debates in the next Congress.
The Financial Choice Act, unveiled in June by Chairman Jeb Hensarling, R-Texas, is a summation of House Republican financial reform proposals that includes a Dodd-Frank "off-ramp" for well-rated banks that maintain high capital levels. The bill would also make structural changes to the Consumer Financial Protection Bureau, which Democrats staunchly oppose.
"The Republican alternative to the failed Dodd-Frank Act – will end taxpayer-funded bailouts of large financial institutions; relieve banks that elect to be strongly capitalized from growth-strangling regulation that slows the economy and harms consumers; impose tougher penalties on those who commit financial fraud; and demand greater accountability from Washington regulators," the committee said in a press release.
Sources said the markup could last two or three days, but the legislation does not have a path to passage in the current Congress.
"Hensarling's plan to scrap much of Dodd-Frank in exchange for a tough leverage ratio can make for an interesting debate, but it's not going to become law," Ian Katz, a policy analyst at Capital Alpha Partners, said in a research note.
Hensarling released a discussion draft of the bill in June, but will likely provide an updated version in the coming days.