Cohn: Congress will 'hopefully' pass bank reg overhaul within months

Cohn: Congress will 'hopefully' pass bank reg overhaul within months
© Greg Nash

White House chief economic adviser Gary Cohn on Friday predicted that Congress could pass a bipartisan bill to exempt dozens of banks from post-crisis financial rules within the next three months.

Cohn said on Bloomberg News that the Senate bill to roll back the Dodd-Frank Act would "hopefully" see floor time in January and pass the House “in the first quarter of this year.”

“We are making enormous progress on a bipartisan basis on bank deregulation,” Cohn said. “We’ve got a bill in the Senate that has bipartisan support to really change the regulatory environment for the vast, vast majority of banks in the United States.”

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Last month, the Senate Banking Committee approved the bill offered by Chairman Mike CrapoMichael (Mike) Dean CrapoTop GOP senator urges agencies to protect renters, banks amid coronavirus aid negotiations Chamber of Commerce, banking industry groups call on Senate to pass corporate diversity bill Senate panel advances Trump Fed nominee who recently supported gold standard MORE (R-Idaho), by a 16-7 vote. Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellTrump signs executive orders after coronavirus relief talks falter Coronavirus deal key to Republicans protecting Senate majority Coronavirus talks collapse as negotiators fail to reach deal MORE (R-Ky.) expressed interest last month in holding a vote on the bill in January, and nearly a dozen Democrats have sponsored the legislation.

Trump campaigned on a promise to "dismantle" Dodd-Frank, the strict 2010 rules on banks passed after the financial crisis, but has been unable to do so thus far. 

The bill would exempt small and mid-size banks from the most stringent parts of Dodd-Frank and scale back federal oversight of the financial system as a whole. But the bill contains no efforts to rein in the Consumer Financial Protection Bureau (CFPB), which would have poisoned the effort for Democrats.

The Crapo bill seems likely to pass the Senate without issue, but House conservatives have already expressed opposition to the compromise.

The Crapo bill is the most substantial attempt to roll back Dodd-Frank that has received bipartisan support. Bank lobbyists have rallied behind the bill as the last chance to make major changes to the post-crisis rules long targeted by the financial sector.

The bill’s lack of restraints on the CFPB has already cost it support in the House. Several GOP members of the House Financial Services Committee told The Hill that they couldn’t support a bill that doesn’t touch the bureau, long loathed by Republicans and the finance industry.

The House passed the CHIOCE Act, sponsored by Financial Services panel Chairman Jeb HensarlingThomas (Jeb) Jeb HensarlingLawmakers battle over future of Ex-Im Bank House passes Ex-Im Bank reboot bill opposed by White House, McConnell Has Congress lost the ability or the will to pass a unanimous bipartisan small business bill? MORE (R-Texas), in June. That bill, which would make deeper changes to Dodd-Frank and leave the CFPB nearly powerless, has been ignored in the Senate.