WASHINGTON — Any remaining industry fears that the House GOP would go to the mat on regulatory relief — trying to expand the Senate’s moderate Dodd-Frank Act reforms — appeared to evaporate Tuesday with Speaker Paul Ryan’s comments that his chamber will pass the Senate version.
But even though the bipartisan Senate deal appears poised for passage, there are still lingering questions about where the reg relief process goes from here. Chief among them is how far lawmakers will go to pass additional piecemeal bills to deliver more relief to banks.
Ryan briefly discussed an agreement with Senate leaders to let their bill move forward in the House unimpeded, but that would also involve “moving in the Senate a package of bills that we think will actually add to this that the [House] Financial Services Committee has acted on as well.”
It is also still unclear when the House will take its vote on the Senate bill, with Ryan only saying “not this week.”
Below are three key questions about where regulatory relief stands:
When will the House vote on the Senate’s bill?
House passage of the Senate reg relief bill, sponsored by Senate Banking Committee Chairman Mike Crapo, R- Idaho, hit a roadblock this spring when House GOP leaders like Financial Services Committee Chairman Jeb Hensarling, R-Texas, vowed they would not “rubber-stamp” the Senate version.
But ongoing resistance by Senate lawmakers, especially moderate Democrats who helped push the legislation forward, raised questions about whether a modified bill could sustain another vote in the upper chamber.
Signs that the standoff was ending came late last month, when Hensarling indicated he was open to the Senate bill proceeding to a vote. House rules for debating and passing legislation could allow the bill to move more smoothly than in the Senate, which requires a 60-vote threshold and the opportunity for seemingly endless debate.
“The minimum for debate in the Senate is at least 90 hours. The minimum in the House is an hour,” said Ed Mills, a policy analyst at Raymond James.
Yet the legislative calendar still makes enacting the bill this month a challenge.
“For there to be a chance for action in May, the House Financial Services Committee would need to approve the bill next week,” Jaret Seiberg, an analyst at Cowen Washington Research Group, said in a client note Tuesday. “That means it needs to be calendared within the next few days. The alternative is for the House to bypass committee action. That is possible, though it would create complications and give Democrats another talking point against the bill.
“To us, it still seems most likely that the House votes in June with July as the drop dead date for action,” Seiberg said.
What remains clear is that reg relief supporters must enact the bill before the end of this year, since the prospect of Democrats seizing control of either chamber in the fall could spoil the opportunity for any legislation passing.
How likely is it that Congress can enact additional reg relief?
The Senate bill, S 2155, was a compromise between Crapo and a core of moderate Democrats, who agreed to targeted changes to Dodd-Frank. Those included raising the asset threshold at which banks are considered “systemically important” from $50 billion to $250 billion, plus numerous changes aimed at helping community banks and credit unions.
While that legislation is now primed to pass as is, there could be opportunity for the House to push for additional measures. Hensarling had previously outlined about 30 provisions that he would like to see in the legislative mix.
Ryan and other Republican leaders suggested there's potentially room for more legislative reform this year.
“We have been working closely with the Speaker and Chairman Hensarling to get S.2155 to the President’s desk and I’m glad this will be happening soon," Senate Majority Leader Mitch McConnell said in a statement Tuesday. "We look forward to an additional reform package coming together that can pass the House and Senate this year.”
Hensarling added that he is anticipating the Senate's consideration of additional House measures.
“I am excited that our negotiations over the last few weeks have culminated in the Senate agreeing to vote on our House bills,” he said in a statement Tuesday.
Still, lawmakers may find that pushing for more changes could prove difficult. Some Senate Democrats who voted to support Crapo’s bill, including Mark Warner, D-Va., had warned the House that an expanded regulatory relief package would die in the Senate. Whether they will prove willing to support additional piecemeal legislation remains to be seen.
“You could easily imagine that McConnell and others in the Senate deciding to shave some of those changes and basically see what they can do that keeps the senators that feel vulnerable on their side,” said Norm Ornstein, a congressional scholar at the American Enterprise Institute.
But he added that he is “skeptical that could work” because it “creates far more division on the Democratic side.”
Isaac Boltansky, of Compass Point Research & Trading, said in a note early Wednesday that additional reg relief proposals being debated in the current Congress are likely, but “our sense is that the vague announcement regarding a secondary package is little more than a maneuver providing sufficient political cover for … Hensarling to yield.”
“If we look beyond the normal political theatre, the simple reality is that S.2155 will become law,” Boltansky said.
Mills agreed that the House measures face a tough uphill climb in the Senate, but he said one possible scenario is provisions with broad backing — such as changes to the Financial Stability Oversight Council — could get tacked on to a larger package like an appropriations bill.
“The ones that are focused on expanding mortgage credit availability and some of the FSOC reforms have the most bipartisan support,” Mills said.
How split will House Democrats be over the Crapo bill?
The Senate’s bill sparked a bitter debate between Democrats in the chamber that could repeat itself in the House. Democratic senators who backed Crapo’s bill found themselves attacked by the party’s progressive wing.
“What does it say about Washington that Republicans and Democrats can't come together to support commonsense gun reforms or solutions for working families — but can come together to deregulate big banks on the 10th anniversary of the start of the 2008 financial crisis?” Sen. Elizabeth Warren said on the floor of the Senate March 14.
The Dodd-Frank reforms will likely draw a stable bloc of House Democratic support, and Hensarling’s proposed measures already enjoy backing by some members of the minority.
But any House debate will also likely draw opposition to the Crapo plan from Democrats further to the left, including Rep. Maxine Waters of California, the Financial Services Committee’s ranking member.
“There are fewer moderate Democrats in the House. There is not the same dynamic but there is a split,” said Mills. “There is a consistent group of about 100 Democrats who will vote no on almost any change to Dodd-Frank in the House.”
In a March statement, Waters blasted the Senate’s vote passing the Dodd-Frank rollback bill.
“Ultimately, when it comes to the financial system, the U.S. Congress simply should not be focused on senseless regulatory rollbacks that threaten hardworking Americans,” Waters said. “Congress should be focused on legislation to enhance consumer protections, provide responsible relief to community banks and hold financial institutions like Wells Fargo accountable.”