With the Republican majority now in place, the U.S. House of Representatives voted on Wednesday to pass a bill that eased some portions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, according to multiple media reports.
The bill passed by a vote of 271 to 154, with 29 Democrats voting in favor of it. Nearly all of the Republican representatives (242 out of 246) voted in favor of the bill. On Monday, the White House threatened to veto the bill if it should pass.
A key part of the new bill delays the implementation of part of the "Volcker Rule," a key piece of the Dodd-Frank Act that limits risky trading by financial institutions. The portion of the Volcker Rule delayed by the new bill had previously been put off by the Federal Reserve until 2017. The new bill gives financial firms another two years (until 2019) to sell off collateralized loan obligations, or bundled debt. Financially industry lobbyists have pushed for the further delay, which will keep them from having to sell off their investments in a fire sale.
The new bill will also allow some private equity firms an exemption from registering with the Securities and Exchange Commission, relax derivative regulation, and permit the omission of historical financial data in filings by some small, publicly traded companies, according to reports.
Republicans have promised to take aim at the Dodd-Frank Act since they gained a majority in both the House and Senate in November's elections. The Dodd-Frank Act was passed in response to the financial crisis and it was intended to protect consumers and prevent another similar economic downturn, but Dodd-Frank opponents believe that the legislation embodies overregulation and as a result has had the opposite of its intended effect.
Democrats, led by Senator Elizabeth Warren (D-Massachusetts), one of Dodd-Frank's fiercest backers and the creator of the controversial Consumer Financial Protection Bureau, have vowed they will fight against any attempts by Republicans to chip away at Dodd-Frank. The new bill moved through the House quickly, but is not likely to gain the support in the Senate needed to override a presidential veto.