House Passes Volcker Rule Repeal in Spending Bill

By Rob Tricchinelli

A spending bill to fund federal regulators, loaded with policy provisions repealing the Volcker Rule and curbing the Consumer Financial Protection Bureau’s authority, passed the House Sept. 14 in a mostly party-line vote, 211-198.

H.R. 3354 would subject the CFPB’s annual funding to the appropriations process and would undo its supervision authority and ability to go after “unfair, deceptive, and abusive practices.” It would also wipe out the bureau’s ability to regulate payday lending, for which a final rule is expected soon, and arbitration, for which a rule was recently adopted.

The bill would also repeal the Volcker Rule, a part of the Dodd-Frank Act that restricts proprietary trading by banks, and negate the Department of Labor’s fiduciary rule, which requires broker-dealers giving certain retirement advice to act in the best interest of their clients.

Its fate is uncertain in the Senate, where the policy provisions will likely be less popular and where Republicans’ majority is slimmer.

Agency Funding Levels

The Securities and Exchange Commission would receive $1.652 billion for fiscal 2018 under the bill, a slight bump that includes $50 million for information technology improvements. The spending bill also includes tweaks to securities laws intended to make it easier for small startups to raise capital.

The Commodity Futures Trading Commission would receive $248 million for fiscal 2018 under the package, a $2 million decrease from the previous year, even though Republican Chairman J. Christopher Giancarlo asked for $281.5 million in an unusual request separate from the White House’s.

The bill is a combination of appropriations legislation covering several other subject areas, including agriculture, interior, commerce, health and human services, labor, homeland security, education, transportation, and housing and urban development.

CFPB, SEC Policies

Rep. Keith Ellison (D-Minn.) sought to amend the spending bill to remove the language that would move the CFPB under appropriations and restrict its authority on the small-dollar lending rule. Both of his attempts were defeated, largely along party lines.

Rep. Bruce Poliquin (R-Maine), who sits on the House Financial Services Committee, crossed party lines and backed both amendments. Democratic Reps. Alcee Hastings (Fla.), Henry Cuellar (Texas), and Collin Peterson (Minn.), were the lone Democrats who supported stripping the CFPB’s payday-lending rule authority.

Language to undo the SEC’s Dodd-Frank-mandated conflict minerals rule, which requires companies to disclose their use of gold, tin, tantalum, and tungsten from the Democratic Republic of the Congo and surrounding countries, was added to the bill in an amendment by Rep. Bill Huizenga (R-Mich.).

“We’ve seen continued problems with what was a well-intentioned part of Dodd-Frank,” Huizenga told Bloomberg BNA. “That’s my frustration. So often, this place is just satisfied with window-dressing, when there’s evidence that it’s not working the way it was advertised.”

That amendment was adopted mostly along party lines, but 10 Republicans opposed it, including Financial Services Committee member Reps. Ed Royce (Calif.) and Tom MacArthur (N.J.).

To contact the reporter on this story: Rob Tricchinelli in Washington at rtricchinelli@bna.com

To contact the editor responsible for this story: Phyllis Diamond at pdiamond@bna.com

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