Despite Partisan Rhetoric, Bipartisan Votes Propel Limited Dodd-Frank Rewrite

n this report, FedFin assesses today’s House FinServ mark-up, during which the Committee voted out nine pieces of legislation that included six derivatives bills, two bills related to implementation of the 2011 JOBS Act, and a bill related to SEC cost-benefit analysis. The most significant of these measures would largely repeal the Lincoln push-out (see FSM Report DERIVATIVES24), sharply limit the extraterritorial reach of Title VII and restrict the law’s inter-affiliate and end-user reach. Although Treasury Secretary Lew on Monday told Congress that the Administration strongly opposes Dodd-Frank reforms, all of the Dodd-Frank revisions were reported on a bipartisan basis (albeit in some cases with fewer Democratic votes than in the last Congress). Ranking Member Waters (D-CA) reiterated that she is open to technical corrections to the Dodd-Frank Act, but also said she is “nervous” about making major changes to Dodd-Frank in general and the derivatives title in particular. She also cited recent financial scandals – money laundering, rate-rigging, and trading losses – as a reason for caution, noting that “we’re smarter now.” Chairman Hensarling touted the bipartisan nature of eight of the nine bills, though the ninth, the SEC Regulatory Accountability Act, passed narrowly along party lines, and the inter-affiliate swaps exemption, which passed unanimously in the last Congress, garnered ten votes from Democrats in opposition. Despite tough rhetoric from some Democrats during discussion of the measures, the derivatives bills all earned support from a majority of Democrats.

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