Will Dodd-Frank reform go the way of ObamaCare repeal?
© Greg Nash

The American Health Care Act (AHCA) debacle is an important lesson moving forward on how NOT to govern. The media – all media from the right to the left – has been full of recriminations about who is to blame for the Republican House’s failure to pass an ObamaCare replacement plan.

Critics believe Republicans can’t lead, and future conservative reforms will never see the light of day. On the contrary, the future could be bright for conservatives, but only if they learn the right lesson as to why the AHCA failed.


The AHCA was a leadership-only driven bill with no initial contributions from rank-and-file conservatives. Will Republicans make the same mistake on reforming the disastrous Dodd-Frank Wall Street and Consumer Protection Act?


Rep. Jeb Hensarling of Texas, chairman of the House Financial Services Committee, has already taken the AHCA experience to heart.

During the mid-1990s, House Leadership under Speaker Newt Gingrich, Majority Leader Dick Armey and House Whip Tom DeLay learned to pass legislation with margins smaller than those the GOP enjoys today. The formula, developed and executed primarily by DeLay, sought to pass the most conservative bills possible through the House. That started with legislative templates that enjoyed wide conservative support with modifications made later in the process. 

With the AHCA, Speaker Paul RyanPaul Davis RyanNow we know why Biden was afraid of a joint presser with Putin Zaid Jilani: Paul Ryan worried about culture war distracting from issues 'that really concern him' The Memo: Marjorie Taylor Greene exposes GOP establishment's lack of power MORE turned the ‘delay’ formula on its head with disastrous results. The execution of the ObamaCare repeal bill found conservatives on the outside looking in throughout the process rather than partners in the process from the onset.

One legislator who seems to understand the winning formula is Rep. Jeb Hensarling. The Texas Republican has been the House champion on reforming Dodd-Frank. His bill, the Financial Choice Act, is a market-based attempt that would peel back the most onerous Dodd-Frank regulatory layers. Hensarling’s legislation begins with a conservative consensus of eliminating the most damaging provisions of the law, particularly the Consumer Financial Protection Bureau (CFPB).


The CFPB, a federal agency established by Dodd-Frank, has been operating under the radar for far too long. Dodd-Frank effectively gave the CFPB unlimited regulatory power with little congressional oversight. The bureau’s budget is not subject to congressional appropriations—no power of the purse—because the Federal Reserve, not Congress, funds the agency. Given its shield from congressional scrutiny, the CFPB’s power to regulate is essentially a government license to destroy. It’s a job-killing regulatory machine.

In 2016, the CFPB had its structure ruled unconstitutional  by a federal appeals court. The court ruled that the unaccountable agency is – well – unaccountable, and thus, the CFPB violates the Constitution's separation of powers. The agency is appealing the decision. However, Hensarling’s new bill would reform the CFPB by making it accountable, and giving it a new mission that requires consumer protection and expansion of competitive markets.

The legislation also repeals the Durbin Amendment, a cronyism provision that Sen. Dick DurbinDick DurbinOvernight Health Care: Takeaways on the Supreme Court's Obamacare decision | COVID-19 cost 5.5 million years of American life | Biden administration investing billions in antiviral pills for COVID-19 COVID-19 long-haulers press Congress for paid family leave Joe Manchin keeps Democrats guessing on sweeping election bill MORE (D-Ill.) proposed at the behest of major corporations. The Durbin Amendment imposes price controls that directly benefit retailers at the expense of consumers. The bill also incorporates more than two dozen bills passed by the House Financial Services Committee to help small business, encourage investment, and assist start-up companies.

Hensarling said that his legislation is guided by several key principles. “Economic growth must be revitalized through competitive, transparent, and innovative capital markets. Every American, regardless of their circumstances, must have the opportunity to achieve financial independence. Consumers must be vigorously protected from fraud and deception as well as the loss of economic liberty. Taxpayer bailouts of financial institutions must end and no company can remain too big to fail.”

In short, the Financial Choice Act’s starting point is exactly where a conservative would want it to be. Compromise can come as the bill works its way through the legislative process. Reforming Dodd-Frank is a major agenda item for President Trump, and the Republicans in Congress should act on it quickly.

As Ryan said after the AHCA was pulled from the House floor, “Governing is hard.” However, if congressional leaders start with a conservative consensus, like they have with the Financial Choice Act, there are still reasons to be optimistic about the GOP’s ability to govern effectively and implement free market reform.

Jerry Rogers is the vice president of the Institute for Liberty, a conservative non-profit based in Washington, D.C.

The views expressed by contributors are their own and are not the views of The Hill.