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The
bill, introduced this summer by the committee chairman,
Republican Jeb Hensarling, would allow banks to choose between
complying with Dodd-Frank or meeting much tougher capital
requirements.
Dodd-Frank, which was passed in the aftermath of the 2007-08
financial crisis and economic recession, has been the target of
ire by Republicans and some banks.
Critics say Congress went too far in its attempt to clamp down
on Wall Street and prevent another financial meltdown and that
the law imposes overly burdensome requirements and gives
regulators too much power.
Corresponding legislation to Hensarling's bill has not been
introduced in the Senate.
Dodd-Frank is one of Obama's signature pieces of legislation and
the Democratic president would be unlikely to sign the measure
if it made its way through both chambers of the Republican-led
Congress.
In July, the top Democrat on the committee, Representative
Maxine Waters of California, said the bill "recycles every bad
idea this committee has ever generated, adds a few more bad
ideas on top, and creates an omnibus of special interest
giveaways that invites the next financial crisis."
Hensarling's bill would also throw out the Volcker Rule that
restricts banks from making speculative investments and
eliminate the authority of the Financial Stability Oversight
Council consisting of regulatory agencies' heads to designate
firms as "systemically important," also known as "too big to
fail."
On Tuesday, the committee will finalize the legislation before
sending it to the full chamber for a vote.
Federal Reserve Governor Daniel Tarullo has said the 10 percent
capital ratio that banks would need in order to opt out of
Dodd-Frank under the legislation is too low.
The legislation is part of a larger debate about financial
regulation's future after Obama leaves office in January. On
Monday, the U.S. Chamber of Commerce released an outline of what
it expects from the next for regulation, a document that
resembled much of Hensarling's bill.
“The new administration will have a chance to measure whether
the financial regulatory system is working, both as a driver of
economic growth and systemic stability," said David Hirschmann,
who heads the Chamber's capital markets branch.
(Reporting by Lisa Lambert; Editing by Peter Cooney)
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