Thursday, June 8, 2017

Glass-Steagall Hail Mary Falls Short–Quietly, With Dems’ Help–as Dodd-Frank Repeal Advances to House Floor

An ambitious bid to replace Republicans’ Dodd-Frank repeal proposal with legislation restoring Glass-Steagall was defeated on Tuesday.

The House Rules Committee voted down the bipartisan Glass-Steagall restoration bill before advancing the push to washout financial reforms passed after last decade’s massive banking collapse.

The move, which wasn’t unexpected, means that the lower chamber will likely go ahead this week with considering conservatives’ Dodd-Frank replacement.

While Democrats on the committee asked for a roll call vote after the Dodd-Frank repeal advanced along party lines, they did not ask for votes to be recorded after the Glass-Steagall motion failed, signifying that the party did not want to attempt to embarrass those who voted against the proposal.

Glass-Steagall refers to Great Depression-era legislation, which segregated retail and investment banking. It was fully repealed by Congress and the Clinton administration in 1999.

Dodd-Frank refers to the 2010 law that created new mechanisms to oversee the banking sector. Republicans’ repeal bill, called the CHOICE Act, would take independence away from the Consumer Financial Protection Bureau and entirely rebrand the watchdog as the “Consumer Law Enforcement Agency.

The CHOICE Act would also nullify provisions of Dodd-Frank that allow regulators to break up failing banks without bailing them out. It would also exempt banks from many Dodd-Frank rules on prudence, if they can satisfy certain requirements on equity injections from investors.

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