The highest ranking Congressman overseeing banking regulation met with Donald Trump in New York on Tuesday, after unveiling a plan to repeal much of Dodd-Frank.
House Financial Services Committee Chair Jeb Hensarling (R-Texas) declined to go into the gritty details when asked about the meeting on Fox Business Channel. He said Trump “well-received the message” and is “interested in the policy.”
“I’m not going to go into the blow-by-blow,” he said.
Hensarling, who endorsed Sen. Ted Cruz (R-Texas) in the primary and is backing Trump in the general election, said he disagreed with many of the nominee’s statements. He wholeheartedly agreed with host Stuart Varney’s assertion, that Trump represents the country’s “only hope” of repealing Dodd-Frank.
Hensarling’s initiative would exempt banks from Dodd-Frank rules if they agreed to hold more cash in reserves, according to Reuters. It would also repeal the Volcker Rule, which prohibits banks from financing speculative trades with federally-insured consumer deposits.
The legislation would additionally scrap the Financial Stability Oversight Council (FSOC), a mutli-agency body created to determine whether financial firms are “systemically important,” and, therefore, “too big to fail”–too influential and wound-up in the banking system to collapse without a government bailout.
The designation requires banks to submit themselves to enhanced regulation, including a rule that requires them to detail how they would resolve themselves without government assistance, in the event of bankruptcy.
Federal regulators can declare these plans “not credible,” a ruling that forces them to either reformulate another outline or start downsizing in two years. In April, the Federal Reserve and FDIC said the plans, or “living wills” drafted by five major banks—Bank of America, JP Morgan Chase, Wells Fargo, New York Mellon, and State Street–were “not credible.”
Hensarling’s plan would also restructure the Consumer Financial Protection Bureau, an agency that has attracted much wrath from conservatives.
This marks the first time that Hensarling has proposed a broad appeal of financial reform. Though he has chaired the House Financial Services Committee since 2013, the Republican “has only moved relatively narrow bills through his committee, rather than push a wholesale repeal of Dodd-Frank,” Roll Call noted last year. Hensarling joked Tuesday that he would be “only replacing 89.7 percent of Dodd-Frank,” not repealing it.
On Tuesday morning, a major advocate of Dodd-Frank, the CFPB, and financial regulation, generally speaking, hit out at Hensarling’s plan.
In a Senate Banking Committee hearing, Elizabeth Warren (D-Mass.) called the bill “a wet kiss for the Wall Street banks.”
“Apparently, Congressman Hensarling thinks that you can end ‘too big to fail’ simply from stopping regulators from calling firms ‘too big to fail,” Warren said of the FSOC proposal, specifically. “I don’t think that’s how it works.”
Warren also hit out at Hensarling for “sprinting toward Trump Tower” while top Republicans have distanced themselves from the nominee–for calling into question the impartiality of Gonzolo Curiel, a federal judge overseeing a lawsuit against Trump University, simply because he is Mexican.
“I get that the Republicans want unity right now,” Warren said. “But if unity means a marriage between Donald Trump’s toxic racism and Jeb Hensarling’s Wall Street giveaways, then I think they’d be better off with division.”
