House Republicans pass bill to rip up fiduciary, post-crisis bank rules

(Bloomberg) -- House Republicans made headway on President Donald Trump's pledge to dismantle post-crisis financial rules by approving a sweeping bill Thursday that rips up major aspects of the Dodd-Frank Act.

Lawmakers approved the legislation, which also scraps the fiduciary rule, in a 233-to-186 vote. But the bill ― called the Financial Choice Act ― has little chance of passing the Senate in its current form.

Senate Democrats, whose votes will probably be needed to adopt it, have repeatedly said they have little interest in revisiting Obama-era constraints on Wall Street that were meant to make the financial system safer. Another issue: Republicans are distracted by more pressing topics such as health care and taxes.

Representative Jeb Hensarling, a Republican from Texas and chairman of the House Financial Services Committee, center, speaks to the media after unveiling the Financial Choice Act June 7, 2016 Bloomberg News
Representative Jeb Hensarling, a Republican from Texas and chairman of the House Financial Services Committee, center, speaks to members of the media after unveiling the Financial Choice Act with Representative Scott Garrett, a Republican from New Jersey, center left, and Representative Bill Huizenga, a Republican from Michigan, at the Economic Club of New York in New York, U.S., on Tuesday, June 7, 2016. Hensarling today proposed the idea of raising several hundred billions of dollars in additional capital and Washington letting you break free from a litany of burdensome rules, a key provision of his long-shot proposal for scrapping the Dodd-Frank Act. Photographer: Michael Nagle/Bloomberg
Wirehouses, broker-dealers and banks unveiled client-friendly policies while asking the agency for further delays.
June 8

Last month, Senate Majority Leader Mitch McConnell laid out the difficult task ahead by saying he's pessimistic Congress will revamp Dodd-Frank anytime soon.

The bill overhauling bank rules, which is sponsored by House Financial Services Committee Chairman Jeb Hensarling, represents Republicans' most aggressive effort to ease strictures that the president blames for stifling lending and economic growth.

"Hopefully, the nightmare of Dodd-Frank will be gone soon," Hensarling, a Texas Republican, said in an interview Thursday. "Of all the regulations that were imposed on our economy in the Obama era, Dodd-Frank was the worst. In the House, we just threw it off. The animal spirits of free enterprise can roam yet again."

The legislation is part of the deregulatory agenda that has swept through Washington since Trump's election win. In the coming days, the Treasury Department is expected to release a report that will add to the push by laying out recommendations for cutting back what Republicans see as red tape that was wrapped around banks after the 2008 crash.