While the rollbacks in the bill are significant, the legislative win for President Donald Trump falls short of pledges he had made to dismantle Dodd-Frank. | John Shinkle/POLITICO House sends major bank bill to Trump, capping years of effort

The House on Tuesday sent a milestone bank deregulation bill to President Donald Trump for his signature, delivering a victory to lenders that spent years fighting to roll back rules enacted in the wake of the 2008 Wall Street meltdown.

The House passed the bill in a 258-159 vote with support from almost all Republicans but only 33 Democrats.


The bill would rewrite some key parts of the 2010 Dodd-Frank law, a signature piece of Obama-era legislation that ratcheted up regulation of the banking industry in response to the financial crisis.

The bill's opponents warned that the effort would put consumers in harm's way and wasn't necessary at a time when the industry is drumming up record profits. But a bipartisan group of lawmakers backing the bill argued that it would make it easier for banks to lend and would adjust regulations to fit the risks posed by lenders of various sizes.

"This is the most pro-growth banking bill in a generation," said House Financial Services Chairman Jeb Hensarling (R-Texas), who helped lay the groundwork for the legislation.

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While the rollbacks in the bill are significant, the legislative win for Trump falls short of pledges he had made to dismantle Dodd-Frank. They're also smaller in scope than past Republican attempts to repeal parts of the law. Despite his support, Hensarling himself said, "I wish it did gut Dodd-Frank. It didn't."

"It turns out that taking a centrist approach — one that was derided by one side as milquetoast and the other as a gift to Wall Street — is the only way to get bipartisan legislation through Congress,” Capital Alpha Partners Director Ian Katz said.

The White House hopes to get the bill to Trump's desk before Memorial Day, a senior administration official said, adding that there might be an announcement in the next couple of days about expediting the president's signature.

The legislation was the product of years of negotiations between Senate Banking Chairman Mike Crapo (R-Idaho) and a small group of Senate Democrats who were willing to retool Dodd-Frank despite resistance from others in their party, who assailed the lawmakers for doing the bidding of the finance industry.

The core group of Democrats were Sens. Heidi Heitkamp (D-N.D.), Joe Donnelly (D-Ind.), Jon Tester (D-Mont.) and Mark Warner (D-Va.). All but Warner face tough reelection contests this year in states that Trump won in 2016. Asked if the Democrats would be invited to attend the bill's signing ceremony, the White House official said invitations hadn't been finalized.



The Senate legislation incorporated deregulatory proposals churned out over several years by the House Financial Services Committee under the leadership of Hensarling, who is retiring in January.

When the Senate passed the bill in March, Hensarling at first refused to take it up because he wanted more House priorities to be addressed. Senate Democrats refused to expand the legislation and threatened to kill it if Hensarling made changes.

As an alternative, Hensarling is now assembling a follow-up package, though it’s unclear if it will be able to attract sufficient backing from Democrats to clear the Senate’s 60-vote threshold.

The bill the House passed Tuesday would ease rules for a wide range of lenders.

The smallest banks would win relaxed mortgage regulations and streamlined capital requirements while escaping restrictions intended to discourage risky bets in bank trading. One of the most controversial elements in the legislation would shield small lenders from mortgage disclosure requirements intended to help fight discrimination.

In a major win for several larger banks and credit card providers, the bill would also create exemptions from enhanced Federal Reserve oversight for banks with $50 billion to $250 billion in assets, such as American Express and SunTrust.

And while the biggest Wall Street players scored significantly fewer wins in the bill than their smaller competitors, a handful of the nation’s largest, internationally active banks including BNY Mellon and Citigroup would benefit from provisions that would soften capital and liquidity requirements.

In addition, consumers would score free credit freezes from credit-reporting companies while active-duty military members would be entitled to free credit monitoring. Veterans who refinance their mortgages would also see new consumer protections.

Taken together, top Democrats with the backing of watchdog groups warned that the rollbacks weren't worth the risks posed to consumers and the economy just a decade out from the worst financial crisis since the Great Depression.

“There are a lot of problems, even with the so-called consumer provisions,” said Americans for Financial Reform policy director Marcus Stanley, who fought the legislation.

In recent days, the biggest question hanging over the bill was the extent to which it would attract support from Democrats — a key data point for an emerging industry narrative that the debates around banking regulation were becoming less partisan.

Political goodwill would help the companies and their trade groups as they gear up to lobby for more rollbacks, including for big changes at the Consumer Financial Protection Bureau, which will be left standing under the bill headed to Trump this week.

But as bank lobbyists focused the last several weeks on making sure Republicans led by Hensarling didn't derail the legislation, Rep. Maxine Waters (D-Calif.), backed by House Minority Leader Nancy Pelosi, rallied Democrats to oppose it. Pelosi described it as "another Republican giveaway to big banks."

Waters, Pelosi and House Minority Whip Steny Hoyer (D-Md.) argued against the bill on the House floor Tuesday, joining forces with Rep. Keith Ellison (D-Minn.), the progressive lawmaker who serves as deputy chair of the DNC.

In stark contrast to the two weeks of debate on the bill in the Senate — where Democrats were some of its strongest defenders and Minority Leader Chuck Schumer's opposition was almost imperceptible — not a single House Democrat spoke in favor of it on the floor.

Even House Democrats who had voted for standalone versions of the bill’s components were uneasy supporting the package. It landed in the middle of primary season, at a time when Democrats are feeling more confident about winning back the House and are trying to craft a message that will resonate in November's elections.

"Passage of S.2155 is an important mile marker, but the hyperbolic rhetoric coupled with only modest Democratic support suggest that this may be the only financial policy bill of consequence for quite some time," Compass Point Director of Policy Research Isaac Boltansky said.

