Republicans Rally Against Volcker Rule
Last month, the new Congress voted a bill through the House of Representatives to delay the Volcker Rule. The bill, HR 4167, Restoring Proven Financing for American Employers Act, passed just one short week after House Democrats defeated the bill to amend various components of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
House Republicans were able to lobby more support from 29 Democrats to pass the measure, which extends the Volcker Rule deadline to 2019 for collateralized debt obligations (CLO), as opposed to 2017. During its time in the House, the bill drummed up considerable partisan tension. Republicans have led the charge to roll back the Volcker Rule provisions, championed by Financial Services Committee Chairman Jeb Hensarling (R – TX). In a recent press release, Hensarling stated, “The president claims this is all about ‘mitigation of risk;’ that he has to ensure that these particular financial institutions aren’t engaged in in unacceptable risk — like he would know. My question is, what was Dodd-Frank all about? So is this a tacit admission that Dodd-Frank has failed?” Representative Scott Garret (R – NJ) also stated, “If the CLO provision goes forward as planned, there will be a heavy price to pay.”
Democrats have strongly rallied against the bill. Upon the passage of the bill on its second vote, Representative Maxine Waters (D – CA) said, “If at first you don’t succeed, try, try, again. Usually we use that saying with children, to encourage them to achieve greater things, but it seems that when it comes to Congress, it’s what Wall Street keeps telling House Republicans.”
The bill will now move to the Senate. It has a reasonable chance of passing through the Republican dominated Senate, considering that the bill passed on the House side with all but one of the Republican Congressmen voting for it. Notably, however, in President Obama’s recent State of the Union he promised to veto any proposed changes to the Dodd-Frank Act.
- Hensarling Press Release: http://financialservices.house.gov/news/documentsingle.aspx?DocumentID=398627