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From Banking and Finance Law Daily, January 8, 2015

Democrats block attempt to amend Dodd-Frank Act

By Stephanie K. Mann, J.D.

A package of 11 bills, the Promoting Job Creation and Reducing Small Business Burdens Act, H.R. 37, which contained controversial changes to provisions relating to derivatives and the Volcker rule was defeated in the House by a vote of 276-146. The legislation was voted on under suspension of the rules, and needed the support of two-thirds of the House to pass.

Support. In response to the vote, Chairman of the Financial Services Committee Jeb Hensarling (R-Texas) said, “As today’s vote demonstrates, there is strong bipartisan support for this pro-jobs, regulatory relief bill. It’s disappointing so many Democrats, who voted for these provisions just four months ago, suddenly switched their votes in a transparent ploy to appease their far left-wing base. They were for this bill before they were against it. They’ve regrettably told the millions of Americans who are still unemployed, the Main Street small businesses that are the engines of economic growth, and our farmers and ranchers in the Heartland that they will sacrifice positive, bipartisan ideas on the altar of ideological politics.” Hensarling encouraged Democratic legislators to abandon partisan alliances and support the bill when next comes to a vote.

Opposition. Commending her Democratic colleagues, Financial Services Committee Ranking Member Maxine Waters (D-Calif) said, “I am very pleased that House Democrats joined together to successfully fight against this Republican effort, a strong rebuke to their strategy of moving controversial legislation in the dead of night. I find it remarkable that just a few hours after gaveling Congress into session, Republicans eagerly brought such a complicated set of bills to the floor—well before any new members had a chance to study these issues or participate in hearings on them.”

Speaking on the floor of the House of Representatives, Rep. Dan Kildee (D-Mich) emphasized the fact that many of the bills contained in H.R. 37 had not gone through the scrutiny of the Financial Services Committee or the legislative process. Because there is not a pending emergency, Kildee emphasized that the legislative process is crucial to ensuring that all voices are heard on this critical issue.

“I’m proud House Democrats stood together today to protect critical Wall Street reforms. Families are only now starting to recover from the devastating financial crisis. Congress must strengthen and fully enforce the Dodd-Frank Wall Street Reform Act,” said Rep. Keith Ellison (D-Minn). Republicans are starting the 114th Congress by fast-tracking bills to help mega banks and slow-walking legislation to support working Americans. Under the leadership of Ranking Member Maxine Waters and Leader Nancy Pelosi, Democrats will continue to stand on the side of America’s working families.”

Trade association reaction. Joining Democratic legislators in their opposition to H.R. 37 is Americans for Financial Reform. According to the trade association, “while this legislation is presented as simple ‘technical corrections’ to the Dodd-Frank Act and other areas of financial regulation, in fact it goes well beyond that. Some elements of the bill, such as Title V on swaps data indemnification, are reasonably classified as bipartisan technical corrections. But others would significantly delay and weaken implementation of core parts of the Dodd-Frank Act such as the Volcker Rule, and could dangerously limit regulatory authority to police financial markets.”

AFR also criticized the legislators for considering the legislation under suspension of the rules. The issues raised by the substantive changes made in this bill deserve careful debate in the new Congress, and should not be rushed through the legislative process without full discussion and debate, said the trade association.

In a letter to Congress, Public Citizen “Not a month since Congress unwisely pierced a key Wall Street safeguard that would have prevented certain bank speculation with taxpayer-insured funds, the House now considers a package with several measures that threaten the fabric of other protections,” according to the letter. “As part of a spending bill to keep the federal government operating, Congress approved a measure last month authored by Citigroup lobbyists to permit certain gambling activities through derivatives within the taxpayer-insured banks, instead of conducting these trades in as separately capitalized affiliate.”

Companies: Americans for Financial Reform; Public Citizen

MainStory: TopStory DoddFrankAct

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