Last week, the GOP-led House of Representatives voted to repeal many of the stricter regulations enacted after the 2008 financial crisis. It was part of a desire to roll back rules that they say have hurt banks, restricted consumer growth and slowed economic progress.
Democrats disagree, as each one voted against the bill.
“I think the memories of politicians in Washington D. C. are very short,” Tampa Representative Kathy Castor told FloridaPolitics.com earlier this week. “I remember sitting across from many of our neighbors who were at risk of losing their homes after they had lost their jobs in the economic collapse of the Great Recession, and now they want to go back to those risky practices where the banks can use their deposits to make risky bets on Wall Street?”
Significant changes included in the Financial Choice Act are major changes such as repealing the trading restrictions, known as the Volcker Rule, and scrapping the liquidation authority in favor of enhanced bankruptcy provisions designed to eliminate any chance taxpayers would be on the hook if a major financial firm collapsed.
“They want to take a lot of the Wall Street cops off of the beat by eliminating the Consumer Financial Protection Bureau (a central part of the Dodd-Frank Act), gutting their ability to hold big banks and others in the financial system accountable,” Castor said. “And they want to eliminate the Volcker Rule that says banks have to be more responsible with their money and not use it to go gamble.”
“I think it’s a step backward for the folks across the state of Florida, especially who lost so much in the Great Recession,” the congresswoman added.
The Financial Choice Act isn’t totally terrible, Castor said.
“In fact there are some new provisions in the Republican bill that are helpful to community banks that I support, so I’m hopeful that they will get into negotiations with the U.S. Senate and those provisions will survive to help our community banks,” she says.
Unlike changes to the Affordable Care Act, making most changes to Dodd-Frank would require 60 votes in the Senate. Republicans in the Senate are working on their own financial regulatory bill that could gain the needed Democratic support.