House Republicans are eager to have Wall Street as a foil.
The author of GOP legislation to overhaul the financial reforms installed by the Obama administration used a new official analysis of the bill to argue Friday that the measure would benefit community banks, not megabanks.
“The Financial Choice Act is not what Wall Street wants, but it is what Main Street and hard-working taxpayers need,” said House Financial Services Committee Chairman Jeb Hensarling, the author of the legislation.
Hensarling was referring to a new report from the Congressional Budget Office finding that none of the eight biggest U.S. banks would choose to meet the bill’s requirements for getting out of certain new banking rules.
House Republicans, who this month advanced the sweeping legislative package to the House floor, have said that big banks would oppose it and that instead community banks and the businesses they serve would benefit. On Friday, Hensarling reiterated that the 2010 Dodd-Frank law, which his bill is meant to revise, tilts the field in favor of big banks. “Wall Street CEOs and Democrats are the ones saying, ‘Don’t repeal Dodd-Frank,'” he said.
Hensarling’s Democratic counterpart on the committee, Rep. Maxine Waters of California, said in a statement to the Washington Examiner that the “Wrong Choice Act would erase all of the progress we’ve made since the Great Recession and put us on the road back to economic ruin. It’s not just a bad bill — it’s an expansively bad bill, with repercussions for our whole country.”
The basis for Hensarling’s claim was the budget office’s finding that the eight U.S. banks considered potential threats to the financial system would decline the choice offered in the bill, which is for banks to get out from some of the new rules if they maintain a higher level of capital. To hit the 10 percent requirement, they would have to raise too much capital.
That analysis accords with what outside groups have found. Investment bank Keefe, Bruyette,…