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Republicans pass banking bill, Knight touts small business impact

Congressman Daniel Webster is applauding the passage of the Financial Choice Act.The bill will go on to the Senate, where the Republicans will have to scrounge together the votes of at least eight Democrats – or make more moderate changes to the legislation – in order for it to pass.The bill is expected to pass in the House on Thursday, largely along partisan lines.President Trump promised in April to give a “major haircut” to Dodd-Frank – a law that consists of hundreds of pages worth of regulations imposed on banks that were meant to prevent abusive lending practices and to stop institutions from becoming “too big to fail”.The Republican-led overhaul of Dodd-Frank was crafted by Rep. Jeb Hensarling of Texas, the chairman of the House Financial Services Committee.The Financial CHOICE Act undercuts several major provisions in Dodd-Frank, including the Consumer Finance Protection Bureau, an independent agency now empowered to protect consumers from deceptive banking practices through fines, lawsuits and market rules.Democrats, meanwhile, branded the new legislation the “wrong choice act” and said the loosening of the rules paves the way for risky bank behavior that contributed to the 2008 crash.The FCA also would restructure the Consumer Financial Protection Bureau (CFPB) and make it harder for that agency to peruse those engaged in predatory lending practices.”We are losing one community bank or credit union every day under the Dodd-Frank Act”, Thornberry said.Surprisingly, one of Dodd-Franks biggest proponents, Barney Frank, for whom the law is named, agreed that a particular aspect of the legislation was in fact over-burdensome; it’s effect on small community banks.Financial stocks soared after the vote, which some say could push Republicans in the Senate to pursue more aggressive reform.The newly passed Republican bill would also get rid of trading restrictions under the Volcker Rule and would strengthen provisions in cases of bankruptcy to protect taxpayers. Also, financial regulators would lose the power to dismantle a failing financial firm and sell off the pieces if they decide its collapse could endanger the system.”This legislation would provide much-needed relief so that individuals, families and entrepreneurs can access the capital they need to invest in homes and small businesses”, Barr said in a statement. “The ranks of the unbanked have increased”, he said.But as The New York Times reports, even Wall Street lobbyists and lawyers were pessimistic about the chances of the bill.Reform of Dodd-Frank now moves to the United States Senate.