House Likely to Pass Amendment to Dodd-Frank this Week
On the second day of the new Congress, House Republicans brought up a measure (HR 37) to ease some requirements under the 2010 Dodd-Frank financial regulatory law. Most controversially, the bill would delay a portion of the Volcker Rule by allowing banks to hold onto CLOs until July 2019.
Republican leaders used a fast-track voting procedure that is usually reserved for noncontroversial measures and requires a two-thirds majority to pass. Democrats were able to thwart the legislation by a 276-146 vote.
However, the HR 37 will likely pass the House this week when Republicans bring another vote on the bill under rules that require only a simple majority for passage.
The White House has threatened to veto the bill.
Some banking experts believe that the measure is part of a larger Republican-led effort to use piecemeal legislation to repeal the entirety of Dodd-Frank.
At a Rules Committee meeting on Monday, Rep. Scott Garrett (R-N.J.) characterized HR 37 as a set of “minor changes” that garnered broad bipartisan support just last year. Rep. Brad Sherman (D-Calif.) challenged this description, noting that while some Democrats in April 2014 approved of delaying the provision until 2017, “Now we’re being told that’s the same as extending it to 2019.”
In recent weeks, Democratic leadership has significantly strengthened its support for aggressive bank reform, while Republicans have made clear their opposition to Dodd-Frank.
The clash over HR 37 suggests that the new Congress is unlikely to find much common ground on issues regarding Wall Street.