The 2010 Dodd-Frank Wall Street reform law gave those agencies great leeway in how to interpret the rules.
Dodd-Frank was adopted in the wake of a financial crisis that left the global economy teetering. He promised to do "a big number" on it.
"Properly structuring regulation of the US financial system is critical to achieve the administration's goal of sustained economic growth and to create opportunities for all Americans", Treasury Secretary Steven Mnuchin said in a statement. The Financial Choice Act also includes "the toughest penalties in history" for those who commit financial fraud and insider trading, he adds. Under Cordray's leadership, the bureau has collected billions of dollars in penalities and restitution from major banks, mortgage lenders, payday loan operations, and debt collectors for violating consumer protection rules.
Another one of the proposals will push regulators to change the way they enforce the Community Reinvestment Act, a frequent target of Republicans. Its budget would be controlled by Congress, it would no longer be able to supervise banks, and the agency would face new, strict limits on how and when it could penalize financial services companies.
The Treasury Department report, said to be about 150 pages long, also recommends giving the President the authority to fire the director of the CFPB at will, an issue that is presently being argued in the courts.
Treasury's new report alleges that the CFPB needs a "significant restructuring", saying that it "was created to pursue an important mission, but its unaccountable structure and unduly broad regulatory powers have led to predictable regulatory abuses and excesses".
The bill passed out of the House on a 233-186 party-line vote.
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If Mr. Trump's regulatory appointees eventually implement them, the recommendations would neuter or pare back restrictions from the Obama administration, which argued the rules were necessary to guard against excessive risk taking and a repeat of the 2008 financial crisis.
Mnuchin also proposed several changes to the "living wills" process, in which major banks are forced to submit plans to regulators on how they'd weather a financial crisis. But Congress' legislation would be needed to actually revamp the law. And it would repeal the Volcker Rule limiting bank trades that threaten deposits.
The Trump administration proposed a wide-ranging rethink of the rules governing the USA financial sector in a report that makes scores of recommendations that have been on the banking industry's wish list for years.
The bill was approved Thursday in the House.
"N$3 early seven years after [Dodd-Frank], regulation has proven to be insufficiently tailored to depository institutions based on the size and complexity of their business models", the report said. Crapo vowed to work closely with the White House and regulators to strike a balance in achieving better regulations to bolster the USA economy. The US Treasury Department unveiled a sweeping plan yesterday to upend the country's financial regulatory framework, which, if successful, would grant many items on Wall Street's wishlist. He did see some positive ideas, however, such as increased coordination among financial regulators. Sherrod Brown's office, the top Democrat on the Senate Banking Committee, the agency consulted with 224 bank industry groups versus 13 consumers advocate organizations.
Looking outside Dodd-Frank, the report calls for a task force to reconsider the Community Reinvestment Act, a 1977 law created to monitor banks' practices in low-income and minority communities, such as new branch openings. The CRA, which became law in 1977, is supposed to mandate that banks make loans in communities where they operate, particularly in low-income neighborhoods.
The law is widely promoted by Democratic lawmakers and community and civil rights groups.
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