James Comey’s explosive testimony wasn’t the only thing happening in Washington yesterday.
In a sign that the administration’s agenda hasn’t been completely derailed by the ruckus over Russia, the House passed a new bill that forms a key plank of Donald Trump’s plan to roll back regulation.
The Financial Choice Act waters down banking-sector rules introduced by the Obama administration, known as Dodd-Frank. The reform bill passed convincingly in the House, though its passage in the Senate, where Republicans only hold a slim majority, remains under a cloud.
The bill weakens the Consumer Financial Protection Bureau, reduces the frequency of banking “stress-testing” and gives banks scope to charge higher fees on debit and credit cards.
“This is a jobs bill for Main Street. It will rein in the overreach of Dodd-Frank that has allowed the big banks to get bigger while small businesses have been unable to get the loans they need to succeed.”
House Republicans suggested the bill was good for businesses everywhere, since it will allow smaller banks to compete more vigorously.
“This is a jobs bill for Main Street,” Speaker Paul Ryan said. “It will rein in the overreach of Dodd-Frank that has allowed the big banks to get bigger while small businesses have been unable to get the loans they need to succeed.”
Second to lower taxes, surveys indicate that the prospect of lighter regulations is a main driver of multiyear levels of CEO confidence.
And the Choice Act isn’t just about regulation of the banking sector. It also has a provision that makes it harder for small shareholders to disrupt proceedings at company shareholder meetings.
Currently, shareholders owning at least $2,000, or 1%, of a company’s stock can offer a proposal for inclusion in the company’s proxy statement for the annual meeting. The new legislation only keeps the 1% part, meaning attacks by activist groups on large companies worth billions of dollars would become much harder to pull off.
“This will help companies concentrate more effectively on investment, innovation and economic growth,” Ball Corporation CEO John Hayes, and a member of CEO peer group Business Roundtable, said.
Hayes said the group looks forward to continue working with Congress to “foster corporate governance and financial services regulations that make America’s business environment more competitive and promote long-term capital formation and value creation.”
The Choice Act’s progress in the Senate, at least in its current form, will likely be filibustered by Democrats, making its House success more a symbolic victory for Republicans. “It’s fate is already sealed as the Senate is expected to focus on crafting its own package of reforms that can clear a 60-vote threshold,” Compass Point analyst Isaac Boltansky said in a client note.