It has been a busy day in Washington, D.C. Among the many goings-on in the nation’s capital, the U.S. House of Representatives passed the Financial CHOICE Act (“CHOICE Act”) by a 233–186 vote. The CHOICE Act amends and/or eliminates many provisions of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act and follows Republican promises to ease federal oversight and regulation of financial services in the United States.
The complete text of the CHOICE Act and summaries of its laws may be found at the House Financial Services Committee website. Highlights of the CHOICE Act include:
- Repealing the “Volcker Rule,” which prohibits federally-insured financial institutions from making certain types of investments;
- Repealing the Orderly Liquidation Authority and enacting of a new chapter in federal bankruptcy law to deal with the failure of large financial institutions;
- Prohibiting the use of the Exchange Stabilization Fund for bailouts;
- Allowing financial institutions with high levels of capital to opt out of some aspects the regulatory framework imposed by Dodd-Frank and Basel III standards;
- Reorganizing the Consumer Financial Protection Bureau (“CFPB”) as the Consumer Law Enforcement Agency (“CLEA”), an executive branch agency with a single director whom the President may remove at will and with restricted supervisory and enforcement authority.
The CFPB’s future was already uncertain as its structure faces constitutional scrutiny in the federal courts. Should the CHOICE Act become law, it would also be the CFPB’s death sentence, and CLEA would take its place.
The CHOICE Act now moves to the Senate, where it will need 60 votes to overcome a likely filibuster and move on to the President’s desk. Given the Democrats’ opposition to the CHOICE Act, most commentators anticipate that it will fizzle out on the Senate floor without ever seeing a vote. Nevertheless, the CHOICE Act offers a glimpse at what reform to the Dodd-Frank regulatory structure might look like. Furthermore, while the political parties don’t agree on what reform should look like, they do agree that Dodd-Frank needs it. Even if (or when) the CHOICE Act fails to pass the Senate, other laws aimed at financial reform are likely to follow. The attorneys in Saalfeld Griggs’ Financial Services Group follow these proposed laws to advise our financial services industry clients. Please contact a member of our Financial Services group if you have questions about the CHOICE Act or this article.
Joshua Feil is an associate in the Litigation and Creditors’ Rights & Bankruptcy practice groups. The information in this article is not intended to provide legal advice. For professional consultation, please contact Erich Paetsch or Joshua Feil at Saalfeld Griggs PC. 503.399.1070. jfeil@sglaw.com © 2017 Saalfeld Griggs PC
