House approves CHOICE; Senate begins work

June 8, 2017 -- The House approved the Financial CHOICE Act (H.R. 10) Thursday on a vote of 233-186, opening the door for the bill to be sent to the Senate for consideration, which is beginning to craft its own re-write of financial regulatory law, overturning much of the 2010 Dodd-Frank Act.

However, the Senate bill – whenever it emerges - is expected to be much narrower in scope than the sweeping House measure.

As approved by the House, H.R. 10 includes provisions that: mandate increased transparency for the NCUA budget (including through public hearings); calls for annual detailing of how the overhead transfer rate (OTR) is determined; and an “off-ramp” allowing financial institutions, including credit unions that maintain an average leverage ratio of at least 10%, the option to be exempt from federal capital and liquidity requirements. The institutions, if they apply for the exemption and receive it, would be defined as “qualifying banking organizations” (QBOs). However, the bill also places the NCUA budget (and budgets of other independent federal financial regulators) under the congressional appropriations process – meaning Congress would have to sign off on the agency’s annual spending plan.

In advance of the House vote, the White House issued a “policy statement” in support of the legislation, noting that the bill reflects “the Administration's Core Principles in several key respects.” The “core principles” were outlined in a Feb. 3 executive order signed by President Donald Trump; the order also mandated a report from the Treasury secretary within 120 days about how the current federal financial regulatory regime fits into the “core principles.” The White House policy noted that the Treasury report (which technically was due last Friday, June 2) “may yield additional views with respect to other provisions of H.R. 10.”

White House policy statement on H.R. 10 (“substitute amendment”)