President Promises to Veto Dodd-Frank Changes
On Tuesday, January 20, 2015, President Barack Obama delivered his annual State of the Union address. During his remarks, the President defended many of his top legislative and administrative accomplishments, including the Affordable Care Act, immigration reform and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). All of these reforms have fallen under attack by private interests and a now Republican-dominated Congress.
In particular, banking lobbies and pro-deregulation Republicans have sought to unwind the Dodd-Frank Act legislation. Recently, an amendment to roll bank the law’s requirement that banks separate risky derivatives trading, specifically targeting swaps, from entities guaranteed by the Federal Deposit Insurance Corporation (FDIC), was slipped into the spending bill. A new bill in the House of Representatives, HR 37, has also gained traction. The bill would delay a portion of the Volcker Rule by allowing banks to hold onto collateralized loan obligations (CLOs) until July 2019. Responding to congressional, media and industry pressure, the Federal Reserve also recently extended the deadline for certain components of the Volcker Rule.
Despite the mounting support for financial deregulation and easing Dodd-Frank Act requirements, the President plans to veto any proposed changes. In his remarks on Tuesday he said, “We can’t put the security of families at risk by taking away their health insurance, or unraveling the new rules on Wall Street, or refighting past battles on immigration when we’ve a got a system to fix … and if a bill comes to my desk that tries to do any of these things, it will earn my veto.” The President’s comments aren’t likely to halt to movement of bills through Congress; however, it is clear that none of these bills will become laws during the next two years.
- State of the Union: https://www.youtube.com/watch?v=cse5cCGuHmE