WASHINGTON — Treasury Secretary Steven Mnuchin's upcoming report on how to rewrite financial regulation is likely to end up looking very similar to a Dodd-Frank overhaul plan in the House, according to the bill's author, Financial Services Committee Chairman Jeb Hensarling.
In a briefing with reporters on Thursday, the Texas Republican said, "I anticipate there will be great similarity in their approach and our approach."
The Financial Choice Act is scheduled for a panel vote on Tuesday, but it has little hope of becoming law due to Democratic opposition in the Senate. Still, some of the provisions of Hensarling's bill could gain momentum with support from the White House.
President Trump directed Mnuchin in February to do a review of all financial regulations, including producing recommendations about a list of actions policymakers can take to ease the impact of Dodd-Frank. Trump also signed an executive order that outlined a set of principles that the report should address. Hensarling saw commonalities in what Trump was examining.
"The outline of principles … it kind of reads to some extent as chapter headings on the Financial Choice Act," Hensarling said.
Senate Banking Committee Chairman Mike Crapo, R-Idaho, and Hensarling have been in close communication with Mnuchin and National Economic Council Director Gary Cohn, who are running point for the White House on financial policy.
The four met Thursday morning, and Crapo told an audience at a Women in Housing and Finance event later that Mnuchin indicated it will be a “complete report.”
“Not just things that the president can do, not just things the regulatory agencies can do, but also things that Congress needs to do," Crapo said. "I also believe in many areas there will be many things the executive branch can do that Congress can back up with statutory legislation.”
Hensarling told reporters that Crapo has been supportive of Hensarling moving forward with the Choice Act. But with filibuster rules intact in the Senate, Crapo has focused on smaller bills and working in a bipartisan manner with Democrats.
Without the same constraints in the House, Hensarling has been able to pass a more aggressive bill.
For their part, House Democrats reportedly plan to drag the committee vote out by offering a long list of amendments. Rep. Maxine Waters, D-Calif., the top Democrat on the financial services panel said during a hearing on the Choice Act on Wednesday that they also planned to hold their own hearing on the bill, an unusual move by the minority. That hearing is set for Friday and Hensarling wouldn’t commit to attending when asked.
“I find it a little ironic that half of them didn’t attend the first hearing” and now they are holding separate hearing, Hensarling said.
While the bill is expected to sail through committee with Republican support regardless of what Democrats do, one provision of the bill might not survive.
The banking industry has fought vigorously to repeal the Durbin amendment to Dodd-Frank, which set price controls on debit interchange fees, since the reform law passed in 2010. A repeal provision is included in the Choice Act.
But the Durbin amendment is supported by retailers and merchants, who have their own strong lobbying force. Forcing a vote on the issue for lawmakers is tough, as it pits them between two powerful special interests.
“I know we have members on both sides of the aisle who may be a little conflicted on the issue, are still listening to both sides, so we will see what happens as we progress through the process,” Hensarling said. “With the exception of Durbin, I think there is otherwise wholesale enthusiasm for every other aspect of the Choice Act” from Republicans.
When asked why he decided to leave such a controversial provision in the bill, Hensarling said he is “fundamentally opposed to federal price controls. I don’t think the promises … of the Durbin amendment have come true. There is a reason we put it in the bill.”
“We expect to mark up the bill next week and go to the floor shortly thereafter,” he added.