House passes sweeping legislation to roll back banking rules

The Republican-led House on Thursday voted to free Wall Street from many of the constraints put in place after the 2008 financial crisis, the opening salvo in what is likely to be a protracted battle over deregulation of the powerful banking industry.

Big banks, from Goldman Sachs to Bank of America, would face less scrutiny, and other large financial institutions, such as insurance giant MetLife, could escape tougher rules allaltogether under the legislation approved largely along party lines.

The Trump administration backed the bill, the Financial Choice Act, as part of a multipronged effort to ease banking regulations to spur economic growth. The legislation probably will face stiff resistance in the Senate, but it provides a road map of sorts for the policies the president plans to put in place as he appoints new regulators. Trump, who has complained about tight lending practices, has ordered three reviews of banking rules, the first of which Treasury Secretary Steven Mnuchin is set to deliver as soon as next week.

Democrats and progressive groups, who argue that banks need more oversight, not less, are preparing to use the issue to animate supporters still angry that Wall Street banks have not paid a larger price for the financial crisis. They noted that banks reported record profits last year, despite tough Dodd-Frank Act rules, and Wall Street bonuses rose for the first time in three years.

Many have expressed particular concern over a provision that would curtail the powers of the Consumer Financial Protection Bureau and reduce its independence by having its director report to the president.

The House’s move is part of a broader GOP agenda — such as the effort to repeal and replace the Affordable Care Act — to reduce the size and influence of the federal government on everyday life.

the legislation has drawn particular ire from Democrats and consumer groups.

“This bill is a vehicle for Donald Trump’s agenda to deregulate and help out Wall Street,” Rep. Maxine Waters (Calif.), the ranking Democrat on the Financial Services Committee, said on the House floor.

The legislation is not likely to pass intact in the Senate, where it would need to garner some Democratic support. But that has not calmed fears among all of the legislation’s critics.

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