Republicans Call on Fed to Halt Rules Until Trump's Picks Are in Place

  • Texas lawmaker joined by 33 other Republicans in letter to Fed
  • Lawmakers threaten to undo regulations if request is defied

Key Republicans in the U.S. House told the Federal Reserve not to issue new rules until President Donald Trump’s pick to lead regulation of Wall Street at the agency is confirmed.

Should the Fed defy the request, lawmakers may undo their work, according to a Thursday letter to Fed Chair Janet Yellen from Jeb Hensarling, chairman of the House Financial Services Committee, and 33 other Republicans on the panel.

“We will work with our colleagues to ensure that Congress scrutinizes the Federal Reserve’s actions -- and, if appropriate, overturns them," according to the letter.

Trump hasn’t announced his selections for any of the three vacancies at the seven-member Fed board, including the never-filled role of vice chairman for supervision, which was created by the 2010 Dodd-Frank financial overhaul law. Among the three positions is that of Daniel Tarullo, who has served as the Fed’s point man on financial regulation, and plans to step down in April.

The Fed has received Republicans’ letter and has no further comment, said Eric Kollig, a spokesman.

Economic Growth

Republicans and the Trump administration say Dodd-Frank and other financial rules have stifled economic growth and harmed consumers. Trump, who has called the law a “disaster,” signed an executive order earlier this month instructing the Treasury Department to examine financial rules and file a report on its findings.

Earlier, other Republicans -- including Patrick McHenry, from North Carolina, and Senator Pat Toomey, from Pennsylvania -- called for Yellen to hold off on various Fed activities until Trump nominees are in place.

In his letter, Hensarling of Texas referred to possible rules related to stress tests for banks that Yellen mentioned when she testified before the House earlier this month. Hensarling said that the Fed should halt rulemaking "absent an emergency," according to the letter.