Republicans in both the House and the Senate have been using various avenues to undermine the Dodd-Frank financial reform law, which was signed last year to rein in the financial industry following the 2008 financial crisis. House Republicans have been attempting to use the budget process to render federal regulators incapable of implementing the law, while Senate Republicans are refusing to confirm nominees to key posts, most notably the director of the new Consumer Financial Protection Bureau. Senate Minority Leader Mitch McConnell (R-KY) confirmed yesterday that Senate Republicans will filibuster any CFPB nominee.
Meanwhile, Senate Republicans have hijacked non-controversial legislation to push their pro-Wall Street agenda. As the Wall Street Journal reports, three Senate Republicans — Sens. Jim DeMint (SC), Jerry Moran (KS), and David Vitter (LA) — have stuck amendments onto an economic development bill aiming to weaken Dodd-Frank or, in DeMint’s case, repeal it outright:
A fairly noncontroversial U.S. Senate bill to support economic-development projects could quickly become contentious next week if Republican critics of the Dodd-Frank financial overhaul have their way. [...]
One amendment filed by tea-party Sen. Jim DeMint (R., S.C.) would repeal the whole financial law…Meanwhile, Sen. Jerry Moran (R, Kan.) has filed an amendment that would replace the new Consumer Financial Protection Bureau — a centerpiece of Dodd-Frank that would have broad powers over the financial industry — with a six-person board…A third amendment, filed by Sen. David Vitter (R, La.) would repeal parts of the Dodd-Frank law that give a council of regulators, known as the Financial Stability Oversight Council, the authority to decide if a company is “too big to fail.”
The amendments suggested by Moran and Vitter are right in line with other GOP efforts to weaken Dodd-Frank. Moran’s amendment would turn the CFPB into an ineffective commission, rather than the strong independent regulator consumers need and deserve, while Vitter’s would prevent regulators from forcing the nation’s biggest banks into abiding by heightened regulations.
Wall Street has actually spent as much to undermine Dodd-Frank this year as it spent trying to shape the bill at the height of the financial reform debate. And Republicans have dutifully played along, attempting to block or undo key parts of the bill. However, this week at least, the banks did not get their way, as an amendment that would have delayed new regulations capping the amount banks can charge merchants for debit card transactions failed to pass the Senate.