A draft of a bill to replace the Dodd-Frank Act — entitled the Financial CHOICE Act — has been released by the House Financial Services Committee with the goal of reforming the Consumer Financial Protection Bureau (CFPB) and financial institution regulations.
In releasing a discussion draft of the new bill, committee chairman Jeb Hensarling (R-TX) said, “Dodd-Frank has failed. It has contributed to the slowest, smallest, weakest and worst economic recovery of our lifetimes. We must instead offer all Americans greater opportunities to raise their standards of living and achieve financial independence by replacing Dodd-Frank with real reforms that work.”
The Financial CHOICE Act — CHOICE stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs — would change the structure and authority of the CFPB as well as reform financial institution regulations. Specifically, the bill would:
- Change CFPB single director to a five-person commission called the Consumer Financial Opportunity Commission (CFOC);
- Make the CFOC’s regulations subject to the Congressional appropriations process;
- Repeal the CFPB’s authority to ban certain bank products and services;
- Repeal the CFPB’s authority to prohibit or limit the use of arbitration agreements;
- Require the CFOC to verify consumer complaint information before making it public;
- Require the CFOC to establish a procedure for issuing written advisory opinions;
- Prohibit the use of the Exchange Stabilization Fund to bail out financial firms or creditors
- Incorporate regulatory relief bills for community financial institutions;
- Make all financial regulatory agencies subject to the REINS Act, bi-partisan commissions, and place them on the appropriations process so that Congress can exercise proper oversight;
- Repeal the authority of the Financial Stability Oversight Council (FSOC) to designate systematically important financial institutions.
A summary of all the provisions of the Financial CHOICE Act can be found here.
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