The House of Representatives today approved a legislative proposal to reverse some of the main axes of the financial reform known as the “Dodd-Frank Act,” set up to tighten regulation and restrict financial risk taking.
The bill, known as the Financial Option Act, was sponsored by Republican Congressman Jeb Hensarling and was ratified with 233 votes in favor (all Republicans), 186 against and 11 abstentions.
They voted against all Democrats and Republican lawmaker Walter Jones of North Carolina.
The Dodd-Frank Act of 2010, pushed by former President Barack Obama after the sharp financial crisis of 2008, reinforced the capital requirements of banks, forced them to carry out annual resistance tests to show their strength and forbade Financial institutions engage in high risk activities with their clients’ money.
Also, the new proposal would neutralize the Office of Consumer Financial Protection, an agency created to defend the rights of people to the abuses of financial institutions.
This first step, which must now pass to the Senate, marks the beginning of the financial deregulation plan promised by President Donald Trump, who accuses regulatory oversight as one of the causes of economic weakness and lack of credit to small businesses.
Analysts predict the bill will die in the Senate because Republicans have a much smaller minority than in the House of Representatives and should therefore persuade some Democratic senator to come forward, which does not appear to occur.
Democrats believe the Dodd-Frank Act has made Wall Street liable for its risky investments and has managed to protect Americans from abusive mortgage loans as well as misleading credit.