House sends major bank bill to trump, capping years of effort – politico power kinetic energy

While the rollbacks in the bill are significant, the legislative win for Trump falls short of pledges he had made to dismantle Dodd-Frank. They’re also smaller in scope than past Republican attempts to repeal parts of the law. Despite his support, Hensarling himself said, "I wish it did gut Dodd-Frank. It didn’t."

"It turns out that taking a centrist approach — one that was derided by one side as milquetoast and the other as a gift to Wall Street — is the only way to get bipartisan legislation through Congress,” Capital Alpha Partners Director Ian Katz said.

The legislation was the product of years of negotiations between Senate Banking Chairman Mike Crapo (R-Idaho) and a small group of Senate Democrats who were willing to retool Dodd-Frank despite resistance from others in their party, who assailed the lawmakers for doing the bidding of the finance industry.

The core group of Democrats were Sens. Heidi Heitkamp (D-N.D.), Joe Donnelly (D-Ind.), Jon Tester (D-Mont.) and Mark Warner (D-Va.). All but Warner face tough reelection contests this year in states that Trump won in 2016. Asked if the Democrats would be invited to attend the bill’s signing ceremony, the White House official said invitations hadn’t been finalized.

When the Senate passed the bill in March, Hensarling at first refused to take it up because he wanted more House priorities to be addressed. Senate Democrats refused to expand the legislation and threatened to kill it if Hensarling made changes.

The smallest banks would win relaxed mortgage regulations and streamlined capital requirements while escaping restrictions intended to discourage risky bets in bank trading. One of the most controversial elements in the legislation would shield small lenders from mortgage disclosure requirements intended to help fight discrimination.

And while the biggest Wall Street players scored significantly fewer wins in the bill than their smaller competitors, a handful of the nation’s largest, internationally active banks including BNY Mellon and Citigroup would benefit from provisions that would soften capital and liquidity requirements.

In addition, consumers would score free credit freezes from credit-reporting companies while active-duty military members would be entitled to free credit monitoring. Veterans who refinance their mortgages would also see new consumer protections.

In recent days, the biggest question hanging over the bill was the extent to which it would attract support from Democrats — a key data point for an emerging industry narrative that the debates around banking regulation were becoming less partisan.

Political goodwill would help the companies and their trade groups as they gear up to lobby for more rollbacks, including for big changes at the Consumer Financial Protection Bureau, which will be left standing under the bill headed to Trump this week.

But as bank lobbyists focused the last several weeks on making sure Republicans led by Hensarling didn’t derail the legislation, Rep. Maxine Waters (D-Calif.), backed by House Minority Leader Nancy Pelosi, rallied Democrats to oppose it. Pelosi described it as "another Republican giveaway to big banks."

In stark contrast to the two weeks of debate on the bill in the Senate — where Democrats were some of its strongest defenders and Minority Leader Chuck Schumer’s opposition was almost imperceptible — not a single House Democrat spoke in favor of it on the floor.

Even House Democrats who had voted for standalone versions of the bill’s components were uneasy supporting the package. It landed in the middle of primary season, at a time when Democrats are feeling more confident about winning back the House and are trying to craft a message that will resonate in November’s elections.

"Passage of S.2155 is an important mile marker, but the hyperbolic rhetoric coupled with only modest Democratic support suggest that this may be the only financial policy bill of consequence for quite some time," Compass Point Director of Policy Research Isaac Boltansky said.