U.S. House eases bank, Wall St. rules

WASHINGTON (AP) ― The Republican-controlled U.S. House of Representatives voted to soften a law that brought the strictest rules for banks and Wall Street since the 1930s, more than six years after the 2008 financial crisis struck.

The bill is one of several that President Barack Obama has threatened to veto as he clashes with newly empowered Republicans who now control all of Congress. The vote was 271-154 on legislation pushed by the newly bulked-up Republican majority in the House. It now goes to the Senate, where it will likely pass despite strong opposition from liberal Democrats like Sen. Elizabeth Warren.

The legislation alters sections of the 2010 Dodd-Frank financial overhaul. Most notably, it would give U.S. banks two extra years ― until 2019 ― to ensure that their holdings of certain complex and risky securities don’t put them out of compliance with a new banking rule.

The bill would revise the so-called Volcker rule, a key part of the financial overhaul law, which would limit banks’ riskiest trading bets. That kind of risk-taking on Wall Street helped trigger the 2008 crisis.

In the House, 29 of 188 Democrats joined the near-unanimous 242 Republicans to vote for the measure.

Republicans in the House have been trying for years to chip away at the Dodd-Frank law, which Congress enacted with mostly Democratic support to tighten regulation with an eye to preventing another crisis. Republicans have denounced the law as an excessive expansion of regulatory authority that’s stifling the competitiveness of the financial industry.

Some Senate Democrats began raising objections Wednesday as the House acted.

Sen. Sherrod Brown, the new senior Democrat on the Senate Banking Committee, called the bill “another attempt by House Republicans to advance Wall Street’s interests at the expense of the American people.”

“Rolling back protections that safeguard against practices that nearly crippled our economy creates unnecessary risks for taxpayers and investors,” Brown said in a statement.

In debate Tuesday night in a nearly empty House chamber, Democratic lawmakers denounced the move as a giveaway to the largest U.S. banks, which hold the bulk of the securities in question.

The bill’s author, Republican Rep. Michael Fitzpatrick, insisted it makes “smart, technical reforms.” It would have the effect of “reining in out-of-control Washington regulators” and helping small businesses create jobs by reducing their compliance burden, Fitzpatrick said.

As passage appeared closer, the Obama White House issued a veto threat Monday, saying the bill “would weaken and undermine” the Dodd-Frank law.