(Bloomberg) -- Senate Majority Leader Mitch McConnell said he’s pessimistic Congress will overhaul the Dodd-Frank Act because he doubts Republicans can secure enough Democratic votes to make major changes to the sweeping legislation that tightened oversight of banks after the financial crisis.
“I’d love to do something about Dodd-Frank, particularly with regard to community banks but that would require Democratic involvement,” Kentucky’s McConnell told Bloomberg News in an interview Tuesday. “I’m not optimistic.”
McConnell said the 2010 banking law has had unintended consequences that have hurt the nation’s smallest banks, a common refrain of Republican lawmakers. Any effort to revamp Dodd-Frank would probably have to go through the Senate Banking Committee, which is led by Mike Crapo. While McConnell said he has discussed the legislation with Crapo, the Idaho Republican has indicated that there isn’t much Democratic interest in revisiting it.
“So far, my impression is the Democrats on the banking committee believe that Dodd-Frank is something akin to the Ten Commandments,” McConnell said.
Despite McConnell’s remarks, helping community lenders hasn’t been the main sticking point in negotiations between Republicans and Democrats.
Ohio Senator Sherrod Brown, the banking panel’s top Democrat, has said he supports relaxing rules for the smallest banks. But Democrats have been vocal in resisting any changes to Dodd-Frank that they say will aid Wall Street, such as scrapping Volcker Rule trading restrictions and weakening the Consumer Financial Protection Bureau.
On Tuesday, Brown pushed back on McConnell’s contention that Democrats are blocking efforts for a bipartisan compromise.
“The Senate Republican leader seems to have forgotten the harm Wall Street’s greed and reckless behavior caused to millions of working families and taxpayers,” Brown said in a statement. “If this were really about community banks, we might have come to an agreement years ago. Republicans are once again using them as leverage to help a rogue’s gallery of special interests.”
Crapo has previously said efforts to revise Dodd-Frank would be slow as most major bills require 60 votes to pass the Senate, and Republicans hold just 52 seats. The House is moving faster, with that chamber’s Financial Services Committee approving legislation earlier this month that would alter many of the law’s key provisions. House Speaker Paul Ryan has said he wants the legislation to move to a floor vote as soon as possible.
Legislative disaster
Absent action by Congress, McConnell said rolling back Dodd-Frank will fall to the Trump administration. After a slow start, President Donald Trump has made progress in recent weeks in filling the agencies that oversee Wall Street with his own appointees.
Trump, who has called Dodd-Frank a “disaster” that has made it difficult for businesses to get loans, signed an executive order in February requiring regulators to examine financial rules. The Treasury Department is scheduled to issue a report on the findings next month, kicking off what the administration has promised will be a broad rewrite of regulations implemented under Dodd-Frank.
Unless the situation in Congress changes, we will be “stuck with whatever the administration thinks it can do on its own to modify the impact of Dodd-Frank,” McConnell said.
Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
