Treasury secretary praises GOP Dodd-Frank rewrite, doesn't endorse it

Treasury secretary praises GOP Dodd-Frank rewrite, doesn't endorse it
© Greg Nash

Treasury Secretary Steven Mnuchin on Thursday praised a sweeping Republican rewrite of the Dodd-Frank Wall Street Reform and Consumer Protection Act without explicitly endorsing it as the GOP administration and lawmakers work toward rolling back post-recession financial regulation.

Mnuchin said Thursday that he welcomed the introduction of the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act, House Financial Services Committee Chairman Jeb Hensarling’s (R-Texas) massive bill to reshape how the federal government regulates the financial system.

“The existing regulatory system is limiting, not stimulating our economy,” Mnuchin, a former Goldman Sachs executive and hedge fund manager, said in a statement. “I applaud the steady commitment and leadership that Chairman Hensarling and his colleagues have provided on these issues.”

Mnuchin said he looked forward to working with Congress and implementing several executive orders geared at financial regulation, but he didn’t explicitly endorse Hensarling’s bill.

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GOP lawmakers and the White House largely agree on what parts of Dodd-Frank to roll back or eliminate. The Financial CHOICE Act and White House executive orders have both targeted the process through which the government labels, monitors and potentially dismantles big banks and firms. They’ve all also spoken out against the Consumer Financial Protection Bureau (CFPB) and plan to drastically reduce its power and independence.

But the administration, House and Senate are operating with different strategies and haven’t reached a consensus. While Hensarling pushes the Financial CHOICE Act, the Senate has considered it dead on arrival and seems likely to focus on bipartisan relief for community banks and credit unions. President Trump has signed several executive orders directing Mnuchin to review parts of Dodd-Frank, but the administration hasn’t released specific policy goals.

Tension has also bubbled up as Hensarling moves the Financial CHOICE Act forward. The chairman has openly expressed frustration at Trump not firing CFPB Director Richard Cordray, though it’s not clear if Trump can legally do so.

Hensarling told Cordray at a Financial Services Committee hearing earlier this month that Trump should have fired him “yesterday.”

“For all of the harm caused to consumers, Richard Cordray should be dismissed by the president,” Hensarling said before Cordray testified to the committee. “Mr. Cordray, I’m surprised you are here.”

When asked by The Hill after the hearing if he was frustrated at the lack of action from the administration, Hensarling said, “They heard me loud and clear today.”

Hensarling told The Dallas Morning News on Wednesday that he didn’t know why Trump hadn’t fired Cordray yet.

"I can only surmise that he's a busy man with lots of priorities," Hensarling said hours before Trump fired off a number of tweets while posing with children. "But I encourage him to fire Mr. Cordray. I wish he would've done it yesterday. But I'll settle for today. And I'll settle for next week, if I have to."