While the RIPA, as well as other bills, were folded into the Financial CHOICE Act, dismantling Dodd-Frank is clearly the target.
Republicans argue that the Dodd-Frank law is slowing economic growth because of the cost of compliance and by curbing lending.
Rep. Maxine Waters, D-Calif., the panel's senior Democrat, called the CHOICE Act "a deeply misguided measure that would bring harm to consumers, investors and our whole economy."
"The bill is rotten to the core and incredibly divisive," Waters said. "It's also dead on arrival in the Senate, and has no chance of becoming law."
Setting aside the fiduciary rule, longtime Democratic strategist Michael Lewan doesn’t see the more moderate Senate doing much with Dodd-Frank either.
“Some things are possible on the Volcker Rule, governance, community banks etc.,” Lewan wrote via email. “But I cannot see the House version passing the 60-vote threshold.”
As for the DOL rule, much is going to depend on how new Labor Secretary Alexander Acosta views the fiduciary issue. During his Senate confirmation hearing, he seemed to suggest that the rule goes too far.
Acosta also pledged to carry out the directives of President Donald J. Trump, who ordered the DOL to delay the rule in a Feb. 3 memo. The department published a 60-day delay that pushed the rule “applicability date” to June 9.
Meanwhile, rule opponents are stepping up lobbying efforts to stave off disruption to the industry. The DOL announced a “transition phase” in which only impartial conduct standards will apply from June 9 until the end of the year.
That is not enough, said Chip Anderson, executive director of the National Association of Fixed Annuities.
“If the rule itself, along with the so-called Impartial Conduct Standards, are allowed to take effect on June 9, it will be extremely traumatic for our industry, and, worse yet, it will be very harmful to consumers who will lose access to advice and products that are badly needed,” he said in a statement.
NAFA has launched a White House grassroots campaign to influence the DOL in its final tinkering with the rule. Another delay is not likely, a former Labor Department undersecretary said last week.
The transition period is DOL’s compromise, added Bradford P. Campbell, counsel at Drinker Biddle & Reath.
“The key message the DOL was trying to send is we're buying time to look at changing the rule by giving you some interim transitional exemptions that basically just imposed the fiduciary standards as their primary requirements and not all of the additional things that you all have told us you are concerned about,” Campbell said.
The impartial conduct standards have three requirements: use a best-interest standard, accept only reasonable compensation and make no materially misleading statements.
Republicans have sought to overhaul the Dodd-Frank legislation for several years, and those prospects brightened when Trump won the White House. The president has denounced Dodd-Frank and promised that his administration would "do a big number" on it.
The Financial CHOICE bill would repeal about 40 provisions of the Dodd-Frank Act. Banks could qualify for much of the regulatory relief in the bill so long as they meet a strict basic requirement for building capital to cover unexpected big losses.
Republicans argued that big banks have done well under Dodd-Frank, but that community banks and credit unions are struggling to keep up with the regulatory burdens imposed by the law.
"This economy is poised to take off, but it's not going to take off as long as Dodd-Frank in its current form remains on the book," said Jeb Hensarling, R-Texas, chairman of the Financial Services Committee. "It's important that we get tax reform done. It's important we get health care reform done, but it's also important we pass the Financial Choice Act."
While the measure is expected to pass the full House, in the Senate, it will need 60 votes to become reality, meaning the GOP will need several Democrats to join their effort.
Leaders of the Senate panel with jurisdiction over a Dodd-Frank overhaul have said they would like to work together to find areas of common agreement to enhance economic growth.
If the Financial CHOICE Act should fail in the Senate, the Wagner bill could re-emerge as an add-on to another piece of legislation.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].