- James I. Clark III
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House GOP Taking a Second Look at Dodd-Frank Financial Reform Law
The newly empowered Republicans in the House of Representatives will attempt to rein in regulators who are in the process of implementing the comprehensive reform of financial rules and advocate for a smaller government role in the mortgage market. By taking control of the House in the recent mid-term elections, the GOP will have more influence over the newly created Consumer Financial Protection Bureau and greater sway over any technical fixes that Congress makes to rules that govern derivatives trading.
“We don’t want them to regulate capriciously, arbitrarily, without engaging in a cost-benefit analysis,” said Representative Jeb Hensarling (R-TX), a member of the House Financial Services Committee. President Barack Obama brought attention to the Republicans’ intent in a recent radio and Internet address, noting that House and Senate members “are now beating the drum to repeal all of these reforms and consumer protections. I think it would be a terrible mistake,” he said.
With Democrats still in control of the Senate and in the White House, it’s highly unlikely that the Republicans will be able to carry out a fundamental revision or even repeal of the Dodd-Frank law. There’s also the possibility of a presidential veto if repeal legislation makes it through both houses on Congress. Because the Republicans now have a majority in the House, the diminished number of Senate Democrats will have to reach across party lines on financial issues for the simple reason that any changes will require support from both parties. Bipartisan compromise will be used to arrive at consensus in the next Congress, said Senator Tim Johnson (D-SD), who is replacing the retiring Senator Christopher Dodd (D-CT), who headed the Senate Banking Committee. According to Johnson, “We sometimes differ on how we achieve our goals, but we have to agree more often than not.”