House Republicans' concern with the Office of the Comptroller of the Currency's fintech charter signals growing lawmaker resistance to the plan, which was already opposed by two prominent Senate Democrats earlier this year.
Republicans have opened multiple fronts against the agency, undertaking separate efforts to cut its funding, roll back past and future rules, and make far broader changes.
A vote on a House plan to replace the Dodd-Frank Act may not happen as quickly as originally expected due to limited floor time and other legislative priorities, such as health care reform, that are likely to take precedent.
The House proposal establishes a 10% leverage ratio as the standard for bank strength, but it says nothing about the riskiness of the bank’s business or the size of its exposure to economic downturns.
Republican lawmakers are citing a recent report that delinquencies rose for loans guaranteed by the Federal Housing Administration as a reason to delay a premium cut, but economists suggest the uptick is related to seasonal issues.
Banks have long been eager to see regulators knocked down a peg in the courts, but now that it might actually happen under President Trump, some are beginning to wonder if it might ultimately boomerang against the financial services industry.
Purported revisions to House Republicans' Dodd-Frank rollback bill raised immediate questions about the GOP's strategy, since the provisions — which were more extreme than when the bill was unveiled last year — immediately sparked Democratic opposition.
A House plan to provide regulatory relief will be more far-reaching when it is reintroduced soon by rendering the consumer protection agency toothless and providing banks with extra incentives to opt into a deregulatory plan.
In reality, the Financial Choice Act has appeal for both those who want to unwind the Dodd-Frank Act and regulatory hawks who want to keep banks in check.
