Dodd-Frank Overhaul Starts Inching Forward on U.S. Senate VoteBy
Preliminary vote clears hurdle to take bill up this week
Democrats spar over whether legislation will hurt consumers
President Donald Trump has promised for more than a year to give banks relief from the Dodd-Frank Act. The moment has arrived.
The Senate voted 67-to-32 Tuesday to formally kick off the process of considering a bill that would mark the biggest congressional overhaul of the post-crisis banking law. In the coming days, the Senate is expected to debate and then pass the measure. It will then go to the House, where lawmakers would also have to approve it for it to reach Trump’s desk.
The legislation is a compromise, with some Democrats voting to advance it Tuesday. The bill doesn’t go nearly as far as many Republicans and some in the finance industry would like, leaving big Wall Street firms in particular close to empty handed. It mostly provides regulatory relief for small and regional banks, including raising the threshold for which lenders are considered “too big to fail.”
Senate Banking Committee Chairman Mike Crapo, an Idaho Republican, sponsored the legislation and has been working behind the scenes with lawmakers in the House and Senate in recent days to hash out an amendment with some last-minute changes.
Democrats are divided on the bill. On one side are moderates who were instrumental in building support for the legislation. Many of those senators are from states Trump won in 2016, and they face tough re-election fights in November. But progressives such as Massachusetts Senator Elizabeth Warren argue Crapo’s bill will undermine crucial reforms put in place after the 2008 financial crisis.
The wedge between Democrats was on full display Tuesday as both sides held dueling press conferences. Warren said that anyone who votes for the bill will put consumers at risk. Senators Jon Tester, Heidi Heitkamp, Joe Donnelly and Mark Warner told reporters that the bill does nothing to help the Wall Street banks that fueled the 2008 meltdown.
“We understand there’s going to be divisions in the Democratic caucus,” Virginia’s Warner said. Democrats are working through our differences “respectfully,” he said.
While House Republicans approved a much more sweeping rollback of Dodd-Frank in June, North Dakota’s Heitkamp said Tuesday that she expects House lawmakers to pass the Senate bill without major changes. If the House does make significant alterations, then “I guess we’re done,” Montana’s Tester added.