The House of Representatives approved legislation Wednesday that would revise the Dodd-Frank financial reform law with delays and exemptions, a sign of the kind of changes that may be in store in a Republican-led Congress.
Among the revisions contained in the
30-page bill, which passed 271-154, is a two-year delay – until 2019 – of a Dodd-Frank provision that forces banks to divest risky financial instruments known as collateralized loan obligations.
The legislation exempts from Securities and Exchange Commission registration requirements investment advisers to venture capital funds and reporting requirements related to assets under management of private funds. The bill exempts from SEC registration certain brokers who specialize in connecting buyers and sellers of small businesses. It also eases securities registration for emerging companies.
A collection of 11 measures, it was deemed a Dodd-Frank “technical corrections” bill by Republicans, who said it would foster capital creation and small business growth. Democrats said it undermines the financial reform law and was rushed through the House without any chance to amend it.
The House vote fell well short of the number needed to override a threatened White House veto.
U.S. Chamber of Commerce President and Chief Executive Thomas Donohue welcomed the bill as a way to smooth the implementation of Dodd-Frank.
The financial law “was written in anger and it was written in a hurry,” Mr. Donohue told reporters Wednesday. “If you don't think you're going to need technical corrections or discussions and explanations, then we're never going to get anywhere.”
Unlike with Obamacare, there's not been a sustained movement to repeal the financial reform law, but instead, ongoing efforts — called fixes by Republicans and substantive changes by Democrats — to chip away at it.
It's unclear how the new Republican majority in the Senate will address the Dodd-Frank corrections bill.
“This bill as a bill is unlikely to advance through the Senate, but I think individual provisions of the legislation could be attached to other vehicles,” said Jason Rosenstock, a partner at Thorn Run Partners, a government consulting firm.
That's what worries Democrats.
Republicans “hope they can jam these bills through Congress by attaching them to 'must-pass' legislation,” Rep. Maxine Waters, D-Calif., ranking member of the House Financial Services Committee, said on the House floor Tuesday. “And most of all, they hope these issues are too complicated or too technical for the American people to understand or care about.”
The chairman of the House Financial Services Committee, Rep. Jeb Hensarling, R-Texas, said individual parts of the bill drew Democrat support as stand-alone legislation.
“There were 11 different provisions — modest — all of which enjoyed broad bipartisan support,” Mr. Hensarling said. “Modest, modest attempts to ensure that small businesses could still survive in an otherwise onerous Washington regulatory climate.”
Mr. Rosenstock expects more Dodd-Frank tweaking by the House Republican majority.
“You could see the House spend time doing one-off bills and then at some point the Senate moving a group of them,” he said.
