Financial Services Committee Chairman Jeb Hensarling (R-TX) formally introduced the Financial CHOICE Act, H.R. 10, following a Wednesday hearing on legislation that seeks to repeal certain Dodd-Frank banking and securities regulations.
Republicans maintain that the bill will end taxpayer-funded bailouts of large financial institutions; impose tougher penalties on those who commit financial fraud and insider trading; demand greater accountability from Washington regulators, and relieve well-capitalized banks from certain regulations.
“The Financial CHOICE Act guarantees that the era of big bank bailouts and “too big to fail” is over. For banks that fail, there will be bankruptcy, not bailouts,” said Chairman Hensarling. “In order to qualify for much-needed regulatory relief, financial institutions will have to be so well-capitalized that they pose no threat to hardworking taxpayers or to our economy.”
In her opening statements, ranking member Maxine Waters said the bill would result in a dismantling of Wall Street reform, a gutting of the Consumer Financial Protection Bureau, and would allow the same “risky and predatory practices” that “paved the path to economic ruin” of the Great Recession.
Republicans called seven witnesses to testify before the committee on Wednesday including Peter Wallison from the American Enterprise Institute; Dr. Norbert Michel from The Heritage Foundation; Honorable Michael Barr, Professor of Law at the University of Michigan Law School; Alex Pollock from The R Street Institute; Dr. Lisa Cook, Associate Professor of Economics at Michigan State University; Hester Peirce from the Mercatus Center at George Mason University; and John Allison, former president and chief executive officer of the Cato Institute.
House Financial Services Committee Democrats, who dubbed the legislation the “Wrong Choice Act,” submitted a letter to Rep. Hensarling requesting an additional hearing “to thoroughly analyze how the legislation would impact consumers, investors, and the American economy.”
The Democrats intend to call witnesses to testify on the Financial CHOICE Act discussion draft at the hearing, which is known as a “minority day hearing.” Waters noted that the Committee held 41 public hearings related to financial reform before passing the House version of Dodd-Frank.