House Prepares to Vote on Financial CHOICE Act

The U.S. House of Representatives will vote this week on the Financial CHOICE Act (H.R.10), authored by House Financial Services Committee Chairman Jeb Hensarling (R-Texas). A recent Washington Post article points out that the vote will likely fall along party lines. As evidence to this point, the article highlights that Democratic lawmakers have withdrawn all of their amendments to the bill, a sign that they do not intend to work with Republicans to reach a bipartisan compromise on the bill.

Related, according to a recent Reuters article, while the CHOICE Act will likely pass in the House, its future is far from certain. Senate Democrats broadly oppose the bill which restricts financial regulators like the Consumer Financial Protection Bureau (CFPB), rolls back a variety of post-crisis regulatory rules, and provides a bank with the option to be exempted from many financial rules and regulations, if it maintains a 10 percent leverage ratio.

Despite the challenges faced by the CHOICE Act in its current form, a recent American Banker article highlights three non-contentious provisions which could receive bipartisan support in Congress: raising the asset threshold for banks to be considered systemically important, raising the asset threshold for banks to be required to conduct internal stress tests, and changing the directorship of the CFPB to a bipartisan commission.

On Friday, June 3rd, SFIG held a member-wide call to review the CHOICE Act's core components. During the call SFIG senior staff, along with our Government Relations Committee co-chairs, walked through major aspects of the bill, the political dynamics around its path through Congress, and aspects of the legislation which could affect securitization. Participants in the call were provided with a securitization Fact Sheet, which outlines the key provisions of the CHOICE Act related to securitization.

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