The U.S. House votes mostly along party lines to pass a major rollback of Dodd-Frank regulations, but the legislation is certain to be substantially rewritten in the Senate.

The House bill would unwind major parts of Dodd-Frank by relieving healthy banks of some regulatory requirements and forcing failing firms through bankruptcy rather than a liquidation process spearheaded by the regulators.

The bill as written is a virtual nonstarter in the Senate, with opposition to most aspects from Democrats and some Republicans, and serves more as a "symbolic victory" for Republicans, says Brown Brothers Harriman's Sean Tuffy. </s> The House of Representatives on Thursday approved a bill that would roll back key parts of the Dodd-Frank bill aimed at Wall Street and financial industry regulatory reform which was passed in the wake of the mortgage meltdown.

The House voted 233-186 to approve the Financial CHOICE Act. The bill would give banks a choice between complying with Dodd-Frank or holding onto more capital.

Critics also say it would eliminate the independence of the Consumer Financial Protection Bureau created by Dodd-Frank, and greatly reduce its ability to regulate.

The bill must still go to the Senate. The Senate is less motivated to pass a repeal of the financial oversight legislation. Instead, the Senate is more interested in a broad-based bipartisan bill that focuses on economic growth and could include some financial regulation reform, NBC News has reported.

President Donald Trump has pledged to repeal the law. In February Trump called Dodd-Frank a "disaster."

In a meeting with business leaders in April, Trump singled out Dodd-Frank as an example of what he called "horrendous" regulations, and pledged to fix it.

"We’re going to be doing things that are going to be very good for the banking industry so that the banks can lend money to people that need it," Trump said at the time.

The CHOICE act faces almost no chance of passage in the Senate, CNBC reported.

Sean Tuffy, who oversees global regulatory intelligence for Brown Brothers Harriman, told CNBC that "This is a symbolic victory for the House Republicans."

Related: Why Republicans Want to Declaw Nation's Consumer Financial Watchdog Agency

Rep. Jeb Hensarling, R-Texas, chairman of the House Financial Services Committee, said "Every promise of Dodd-Frank has been broken." He said the bill will end what he called bank bailouts.

Rep. Maxine Waters, D-California, ranking member of the financial services committee, called the CHOICE Act "one of the worst bills I have seen in my time in Congress" and "a vehicle for Donald Trump's agenda to deregulate and help out Wall Street."

"This bill would create vast harm, and lead us right back to the bad old days," Waters said. </s> WASHINGTON, June 8 (Reuters) - The U.S. House of Representatives on Thursday voted largely along party lines to replace the 2010 Dodd-Frank Wall Street reform law, a move that is expected to die in the Senate but open the door to revamping or eliminating regulations that came out of the 2007-09 financial crisis.

The bill, called the CHOICE act, was approved by a vote of 233-to-186. Authored by House Financial Services Committee Chairman Jeb Hensarling, a Republican, it gives banks a choice between complying with Dodd-Frank or holding onto more capital. It also restructures the Consumer Financial Protection Bureau, created under Dodd-Frank to guard individuals against fraud in lending. (Reporting by Lisa Lambert and Sarah N. Lynch; Editing by Leslie Adler) </s> The House of Representatives on Thursday passed sweeping legislation to strip and replace much of the financial regulations passed under former President Barack Obama Barack Hussein ObamaBiden makes supporters nervous; his gaffes could derail him Difference between primaries and caucuses matters in this election Harris apologizes and says she didn't hear questioner call Trump policies 'mentally retarded' MORE after the 2008 financial crisis.

The House passed the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act, 233-186, along party lines. The bill is not expected to pass the Senate.

Sponsored by House Financial Services Committee Chairman Jeb Hensarling (R-Texas), the CHOICE Act is the most ambitious Republican effort to roll back the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in 2010. Republicans have long targeted Dodd-Frank, saying it has created a crushing regulatory burden that suffocates small businesses and banks while empowering unaccountable bureaucrats.

“Dodd-Frank represents the greatest imposition on our business enterprises than all Obama-era regulations combined,” Hensarling said Thursday morning in a briefing with reporters. “In many respects, it was not a response to the financial crisis, but a grab bag of leftist ideas that were waiting on the shelf for quite some time.”

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Democrats have fiercely defended Dodd-Frank. They say the bill has held Wall Street accountable for the risky investment practices that caused the crisis and protected Americans from predatory lending and abusive financial firms.

"It's shameful that Republicans have voted to do the bidding of Wall Street at the expense of Main Street and our economy,” said Rep. Maxine Waters (Calif.), the ranking Democrat on the Financial Services Committee. “They are setting the stage for Wall Street to run amok and cause another financial crisis. I urge my colleagues in the Senate not to move on this deeply harmful bill."

The CHOICE Act would roll back much of the Dodd-Frank regulations long targeted by Republicans. It would allow banks that reach certain cash thresholds an off-ramp from Dodd-Frank, reduce the frequency of federal stress tests and restrain oversight powers of several federal agencies that the 2010 law expanded.



Hensarling’s bill would also eliminate orderly liquidation authority — the process through which the federal government takes over and dismantles a major bank before it collapses — and place strict limits on the Consumer Financial Protection Bureau (CFPB).



The CHOICE Act would turn the CFPB, which Republicans consider abusive and unaccountable, into the Consumer Law Enforcement Agency. It would no longer control its own budget, its director would be appointed by the president, and it would lose its authority to crack down on “unfair, abusive and deceptive practices.”

Speaker Paul Ryan Paul Davis RyanScott Walker's son considers congressional run Bloomberg revises story on Trump Labor pick who was reinstated Labor reinstates official accused of anti-Semitic posts by Bloomberg story: report MORE (R-Wis.) and GOP leaders touted the bill in the weeks before Thursday’s vote. Ryan, a longtime Hensarling ally who served with him on the House Budget Committee, on Wednesday called the CHOICE Act “the crown jewel” of the GOP deregulation agenda.

“This legislation comes to the rescue of Main Street America,” Ryan said Wednesday. “The Financial CHOICE Act makes it possible for small businesses across this country to stop struggling and to start hiring.”



Democrats have universally opposed the CHOICE Act, claiming it's a boon for Wall Street that puts American consumers at risk. House Minority Leader Nancy Pelosi (D-Calif.) called it “a dangerous Wall Street-first bill that would drag us back to the days of the Great Recession.”

The CHOICE Act is unlikely to pass the Senate, where the Republican majority is too slim to overcome a Democratic filibuster. Lawmakers on the Senate Banking Committee have floated a bipartisan measure to relieve regulations on smaller banks, which has received measured interest from House members.

Trump administration officials have called on the House to pass the CHOICE Act, while urging the Senate to work on changes that could clear the chamber.

Hensarling said he’s also looking to pass some aspects of the bill through budget reconciliation, the budgetary maneuver Democrats used to pass ObamaCare and Republicans are using to repeal it.

While Hensarling said he’s discussed the bill with his Senate counterpart, Banking Committee Chairman Mike Crapo Michael (Mike) Dean CrapoA US-UK free trade agreement can hold the Kremlin to account Oversight Republicans demand answers on Capital One data breach On The Money: Fed cuts rates for first time since financial crisis | Trump rips Fed after chief casts doubt on future cuts | Stocks slide | Senate kicks budget vote amid scramble for GOP support MORE (R-Idaho), he declined to say what the upper chamber should do.

“I’m certainly not going to advise Chairman Crapo on how to proceed from here,” Hensarling said. “The Senate is a very different animal than the House.” </s> House Republicans voted Thursday to deliver on their promise to repeal Dodd-Frank — the massive set of Wall Street regulations President Barack Obama signed into law after the 2008 financial crisis.

In a near party-line vote, the House approved a bill, dubbed the Financial Choice Act, , which scales back or eliminates many of the post-crisis banking rules.

The legislation is the brainchild of House Financial Services Committee Chairman Jeb Hensarling, R-Texas.

"Dodd-Frank represents the greatest regulatory burden on our economy, more so than all the other Obama-era regulations combined," Hensarling told reporters Wednesday. "There is a better way: economic growth for all; bank bailouts for none."

Hensarling's nearly 600-page bill would defang Dodd-Frank by repealing the so-called Volcker Rule, which prevents government-insured banks from making risky bets with investments. It would also scrap a requirement, which goes into effect Friday, that retirement advisers put their clients' interests ahead of their own.

In perhaps the biggest partisan flashpoint, the bill aims to scale back the authority of the Consumer Financial Protection Bureau to regulate large banks and payday lenders.

The CFPB was created under Dodd-Frank and is designed to operate as an independent watchdog with a single director. Hensarling considers its structure to be undemocratic.

"To think in a democracy that one un-elected individual can functionally decide what credit cards go in our wallets, what mortgages we can have on our home, whether or not we even have a checking account. I mean, that's just anathema to me to the founding principles of this republic," Hensarling said while speaking last month at the right-leaning American Enterprise Institute.

Financial reform advocates argue the Choice Act would leave the U.S. economy vulnerable to another financial crisis.

"It is bad for consumers, it is bad for investors, and it's bad for the stability of the American economy — which is bad for all of us," said Lisa Donner, executive director of Americans for Financial Reform. "People believe there should be more — not less — regulation of Wall Street. They're worried about regulators being too weak and being too afraid to take on the big guys. Not about their being tough."

"The bill even specifically exempts payday and car title lenders — notorious for springing devastating debt traps for their already vulnerable customers — from any regulation," added Yana Miles, senior legislative counsel for the Center for Responsible Lending.

The top lobbyist for the banking industry — which supports parts of the Choice Act — says the bill would bring relief to community banks, which many say have been overburdened by Dodd-Frank's onerous, one-size-fits-all regulations.

"We are not seeking to roll back all of the policy response, all of Dodd-Frank," said Rob Nichols, president and CEO of the American Bankers Association. "That's not our intention. Our intention is to acknowledge what many regulators and legislators will tell you both publicly and privately, which is aspects of Dodd-Frank overshot."

The Senate has been working on a separate bill that is more focused on loosening regulations on community banks. Federal Reserve Chair Janet Yellin has endorsed efforts to "mitigate the regulatory burden" when it comes to small banks.

Frank: "You don't get everything 100 percent right the first time"

Former Rep. Barney Frank of Massachusetts agrees — despite having his name attached to the regulations, alongside that of former Sen. Christopher Dodd, D-Conn.

"Anytime you pass a very complicated piece of legislation, you don't get everything 100 percent right the first time," said Frank, who is the former Democratic chairman of the House Financial Services Committee.

Frank says his namesake financial reform law has been too restrictive on smaller banks. He also believes the threshold used to identify other banks "as too big to fail" should be higher.

"Beyond that what you have are Republicans — including the chairman of the committee, Mr. Hensarling, who is a very honorable, very pleasant, deeply rigidly ideological conservative who is essentially against any regulation."

Democratic opposition can stop the bill in the Senate

Even though some Democrats recognize there are some problems with Dodd-Frank, they are unified in opposing the Choice Act.

"The Wrong Choice Act is a vehicle for Donald Trump's agenda to get rid of financial regulation and help out Wall Street. It's an invitation for another Great Recession, or worse," said California Rep. Maxine Waters, currently the top Democrat on the House Financial Services Committee.

Hensarling's bill is a revised version of legislation he proposed last year, which stalled in Congress. Waters says it's no surprise that Republicans see success in their sights this time around.

"With the majority that they have in the House and the Senate and President Trump, this is their big opportunity to deregulate, deregulate, deregulate — and they're going to go for it," she said.

But the GOP will run into obstacles in the Senate, because Republicans in the upper chamber don't have the 60 votes needed to pass the legislation.

"If I live my life thinking that something might not pass the Senate, I would never even get up and bother to go to work," he said. </s> House lawmakers are poised to pass the "crown jewel" of the GOP-led regulatory reform effort on Thursday, effectively gutting the Dodd-Frank financial regulations that were put in place during the Obama administration.

Called the Financial Choice Act, the Republican bill seeks to undo significant parts of the 2010 financial reform law.

Crafted by House Financial Services Chairman Jeb Hensarling, the bill is expected to pass despite vehement objections by Democrats to preserve the sweeping law aimed at preventing another financial crisis and protecting American consumers. For any bill to pass in the House, it requires at least 218 votes.

Republicans criticize the Dodd-Frank regulations as the primary driver for anemic economic growth in the U.S. and for enshrining too-big-to-fail, which they say paves the way for future taxpayer bailouts of the country's biggest banks.

On Wednesday, House Speaker Paul Ryan told reporters Hensarling's bill would keep the GOP's promise to cut onerous financial regulations in order to help create jobs and foster economic growth.

"We see the Financial Choice Act as the crown jewel of this effort," Ryan said at a press conference. "The Dodd-Frank Act has had a lot of bad consequences for our economy, but most of all in the small communities across our country."

Hensarling's bill would give the president the power to fire the heads of the Consumer Financial Protection Bureau, a consumer watchdog agency created under Dodd-Frank, and the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, at any time for any -- or no -- reason.

It also gives Congress purview over the CFPB's budget, meaning lawmakers could defund the agency entirely.

The GOP proposal would also bar the Federal Deposit Insurance Corp. from overseeing the so-called living will process, which requires banks to write up plans on how they would safely be unwound in the event of a collapse. The FDIC and the Fed are the two regulators responsible for overseeing this requirement under the 2010 law.

Democrats objected to the bill calling it the "Wrong Choice Act." They say it would return the country to the "regulatory Stone Age" and be a disaster for the U.S. financial system.

"We are putting taxpayers again in harm's way," said New York Democrat Carolyn Maloney, speaking on the House floor on Wednesday.

Related: Trump wants to revive a 1933 banking law. What that means is very unclear

Minority lawmakers also argue Hensarling's bill would gut consumer protections and allow banks to make risky investments that required taxpayers to come to the rescue of the nation's largest financial institutions almost a decade earlier.

In an editorial posted on Medium this week, Maxine Waters, the top Democrat on the House panel, said "Donald Trump and Republicans want to go back to the bad old days and lead all of us down the road to another financial crisis."

Should the House bill pass, its destiny will be in the hands of the Senate.

Senate Republicans will likely seek to craft their own companion measure to overhaul the Dodd-Frank regulations.

Led by chairman Mike Crapo, the GOP senators say they want to take a bipartisan approach to creating a regulatory relief bill for Wall Street and community banks. Crapo has been working closely with his counterpart Sherrod Brown, a top Democrat on the panel, to find common ground.

"Democrats have shown we're willing to work with Republicans to tailor the rules where it makes sense, but not if it means killing the reforms that have made the financial system safer and fairer," Brown said in a statement.

Crapo has vowed to work with all stakeholders, including the Trump White House and regulators, "to strike a balance" in achieving smart regulation that spurs the U.S. economy.

The Idaho Republican has set his own target of early 2018 to pass major bank reform legislation.

Related: Wall Street hates the Volcker Rule. Will Trump finally kill it?

Unlike the House, Republicans will need to sway at least eight Democrats to pass a regulatory reform bill to cross the 60-vote threshold. GOP senators currently hold 52 seats in the Senate.

Those who closely follow the debate believe there's no chance Hensarling's bill would pass the Senate as is. Rather, they expect the upper chamber to advance a separate regulatory relief bill of their own.

"We continue to see no path forward for this legislation in the Senate," said Jaret Seiberg, an analyst with Cowen & Co., in a note to clients ahead of the House vote.

Senate Republicans will have two options to advance President Trump's promise to dismantle the "horrendous" Dodd-Frank law.

They could try to pass a regulatory relief bill through reconciliation, which only requires a 50-vote majority to pass the Senate. That would likely mean a smaller number of limited changes to the Dodd-Frank Act rather than a major single legislative package.

Or they could leave the 2010 regulatory reform law intact and put the onus on regulators, like the Federal Reserve and the Federal Deposit Insurance Corp., to rewrite some of the rules.

"Much of the language in Dodd-Frank is vague and gives a lot of discretion to regulators on how they write the rules so, over time, I expect the Trump administration will amend some of the Dodd-Frank rules," said Brian Gardner, a policy analyst with Keefe, Bruyette & Woods, in a podcast.

Related: Trump's pick for No. 2 spot at Treasury drops out

Any changes to the Dodd-Frank regulations, however, require the approval of those in top regulatory posts at three bank regulatory agencies -- the Fed, the FDIC and the Comptroller of the Currency -- several of which the president has yet to nominate. Trump has yet to fill three open slots on the Fed board, including a new regulatory czar.

On Monday evening, the president tapped Joseph Otting, a former colleague of Treasury Secretary Steven Mnuchin at OneWest to run the Office of the Comptroller of the Currency. He will oversee more than 1,000 lenders, including big Wall Street banks. His position still requires Senate approval.

The spotlight on the financial reform this week could "convince the White House that it's time to act on these key nominations," said Seiberg. </s> House lawmakers on Thursday advanced the “crown jewel” of the GOP-led regulatory reform effort, effectively gutting the Dodd-Frank financial regulations that were put in place during the Obama administration.

The Republican bill, called the Financial Choice Act, passed the House 233-186 along party lines. The bill seeks to undo significant parts of the 2010 financial reform law.

Crafted by House Financial Services Chairman Jeb Hensarling, the bill passed despite vehement objections by Democrats to preserve the sweeping law aimed at preventing another financial crisis and protecting American consumers.

“Every promise of Dodd-Frank has been broken,” said Hensarling following his bill’s approval. “We will replace economic stagnation with a growing healthy economy.”

Republicans criticize the Dodd-Frank regulations as the primary driver for anemic economic growth in the U.S. and for enshrining too-big-to-fail, which they say paves the way for future taxpayer bailouts of the country’s biggest banks.

On Wednesday, House Speaker Paul Ryan told reporters Hensarling’s bill would keep the GOP’s promise to cut onerous financial regulations in order to help create jobs and foster economic growth.

“We see the Financial Choice Act as the crown jewel of this effort,” Ryan said at a press conference. “The Dodd-Frank Act has had a lot of bad consequences for our economy, but most of all in the small communities across our country.”

Hensarling’s bill would give the president the power to fire the heads of the Consumer Financial Protection Bureau, a consumer watchdog agency created under Dodd-Frank, and the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, at any time for any — or no — reason.

It also gives Congress purview over the CFPB’s budget, meaning lawmakers could defund the agency entirely.

The GOP proposal would also bar the Federal Deposit Insurance Corp. from overseeing the so-called living will process, which requires banks to write up plans on how they would safely be unwound in the event of a collapse. The FDIC and the Fed are the two regulators responsible for overseeing this requirement under the 2010 law.

Democrats objected to the bill calling it the “Wrong Choice Act.” They say it would return the country to the “regulatory Stone Age” and be a disaster for the U.S. financial system.

“This is a dangerous piece of legislation,” Steny Hoyer, the House minority whip said on the House floor on Thursday. He said the bill would repeat recent history and put Americans at risk of losing millions by taking “referees off the field.”

Minority lawmakers also argue Hensarling’s bill would gut consumer protections and allow banks to make risky investments that required taxpayers to come to the rescue of the nation’s largest financial institutions almost a decade earlier.

“It’s shameful that Republicans have voted to do the bidding of Wall Street at the expense of Main Street and our economy,” said Maxine Waters, the top Democrat on the House panel.

Now the bill’s destiny will be in the hands of the Senate.

Senate Republicans will likely seek to craft their own companion measure to overhaul the Dodd-Frank regulations.

Led by chairman Mike Crapo, the GOP senators say they want to take a bipartisan approach to creating a regulatory relief bill for Wall Street and community banks. Crapo has been working closely with his counterpart Sherrod Brown, a top Democrat on the panel, to find common ground.

“Democrats have shown we’re willing to work with Republicans to tailor the rules where it makes sense, but not if it means killing the reforms that have made the financial system safer and fairer,” Brown said Wednesday in a statement.

On Thursday, Hensarling said he regularly speaks with Crapo, who he said has “encouraged” him to pass the bill.

“I still think he has high hopes of putting together a companion legislation,” said Hensarling. “What a package would look like I don’t necessarily know,” he said, referring questions to Crapo.

Crapo has vowed to work with all stakeholders, including the Trump White House and regulators, “to strike a balance” in achieving smart regulation that spurs the U.S. economy.

The Idaho senator lauded the bill’s passage as a “positive move away from government micromanagement, and returns to basic principles of safety and soundness and market-driven principles.”

He has set his own target of early 2018 to pass major bank reform legislation.

Unlike the House, Republicans will need to sway at least eight Democrats to pass a regulatory reform bill to cross the 60-vote threshold. GOP senators currently hold 52 seats in the Senate.

Those who closely follow the debate believe there’s no chance Hensarling’s bill would pass the Senate as is. Rather, they expect the upper chamber to advance a separate regulatory relief bill of their own.

“We continue to see no path forward for this legislation in the Senate,” said Jaret Seiberg, an analyst with Cowen & Co., in a note to clients ahead of the House vote.

Senate Republicans will have two options to advance President Trump’s promise to dismantle the “horrendous” Dodd-Frank law.

They could try to pass a regulatory relief bill through reconciliation, which only requires a 50-vote majority to pass the Senate. That would likely mean a smaller number of limited changes to the Dodd-Frank Act rather than a major single legislative package.

Or they could leave the 2010 regulatory reform law intact and put the onus on regulators, like the Federal Reserve and the Federal Deposit Insurance Corp., to rewrite some of the rules.

“Much of the language in Dodd-Frank is vague and gives a lot of discretion to regulators on how they write the rules so, over time, I expect the Trump administration will amend some of the Dodd-Frank rules,” said Brian Gardner, a policy analyst with Keefe, Bruyette & Woods, in a podcast.

Any changes to the Dodd-Frank regulations, however, require the approval of those in top regulatory posts at three bank regulatory agencies — the Fed, the FDIC and the Comptroller of the Currency — several of which the president has yet to nominate. Trump has yet to fill three open slots on the Fed board, including a new regulatory czar.

On Monday evening, the president tapped Joseph Otting, a former colleague of Treasury Secretary Steven Mnuchin at OneWest to run the Office of the Comptroller of the Currency. He will oversee more than 1,000 lenders, including big Wall Street banks. His position still requires Senate approval.

The spotlight on the financial reform this week could “convince the White House that it’s time to act on these key nominations,” said Seiberg. </s> Under consideration in the House of Representatives today: a big Republican platform item. Specifically, the rollback of Dodd-Frank financial regulations. This comes in the form of a bill called the Financial Choice Act. Here’s what’s in the bill and what could become law.

Click the audio player above to hear the full story. </s> WASHINGTON (Reuters) - U.S. banking regulators on Tuesday eased trading regulations for Wall Street banks, giving them one of their biggest wins under the Trump administration but drawing criticism from consumer activists who warned of potential risks to taxpayers.

FILE PHOTO: Jelena McWilliams, chairman of the Federal Deposit Insurance Corporation, on Capitol Hill in Washington, U.S. January 23, 2018. REUTERS/Aaron P. Bernstein/File Photo/File Photo

The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) approved the revamped version of the so-called “Volcker Rule,” which aims to ban lenders that accept U.S. taxpayer-insured deposits from engaging in proprietary trading.

The changes, first proposed in May 2018, followed years of lobbying by banks, including Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N) and Morgan Stanley (MS.N), which have long complained the rule is too vague and complex.

The new rule gives banks more leeway in terms of trading activity and simplifies how banks can tell if that trading is permitted by law.

While many regulatory experts have agreed the prior rule was too cumbersome, the changes were criticized by consumer groups and Democratic lawmakers who say a rewrite could put taxpayers at risk.

FDIC Commissioner Martin Gruenberg, a Democrat who backed the Volcker rewrite proposed in May 2018, voted against the final rule Tuesday, saying it would “effectively undo” the rule’s protections.

In particular, he warned that the new rule narrows the definition of banned trading in a way that could free up banks to engage in riskier bets with potentially billions of dollars in financial instruments.

The other three FDIC board members, all Republicans, voted in favor.

Democratic Representative Maxine Waters, who chairs the House Financial Services Committee, accused regulators of undercutting a cornerstone of Wall Street reforms introduced by the 2010 Dodd-Frank law.

“The final rule published today would curtail prohibitions in a manner that Congress never intended,” she said in a statement calling on other regulators to halt the project.

Analysts say the final rule, which is significantly different from the proposed 2018 version, could also be vulnerable to legal challenges.

The rewrite aims to clarify which trades are exempt from the ban, such as when banks facilitate client trades and hedge risks, and to expand those exemptions. The final rewrite scraps a proposed new test for identifying proprietary trading that banks complained would have made the rule even more complicated.

That proposed “accounting test” was meant to replace a more subjective test that aimed to identify if a trader intended a trade to be speculative. But banks argued it could apply to a host of additional financial instruments not meant to be covered by the rule.

The final rule scraps that proposal for large Wall Street firms, instead simplifying the original test and only applying it to much smaller banks.

At the same time, the rewrite simplifies a separate part of the rule which makes it easier for banks to invest in hedge funds or private equity funds. Regulators said they expect to propose further easing of the “covered funds” aspect of the rule, including for foreign firms, later this year.

The banking industry hailed the rule, while calling for regulators to expedite that additional relief.

FILE PHOTO: Joseph M. Otting speaks after being sworn in as Comptroller of the Currency in Washington, U.S., November 27, 2017. REUTERS/Joshua Roberts

“We urge the regulators to finish the job of Volcker Rule reform,” said Kevin Fromer with the Financial Services Forum, an industry group that represents the CEOs of the nation’s biggest banks.

The rule will become effective on Jan. 1, 2020, but banks will have one year to comply.

The OCC and the FDIC are two of five regulators charged with implementing the rule. The others - the Federal Reserve, the Securities and Exchange Commission, and the Commodities Futures Trading Commission - are expected to approve the new rule soon. </s> WASHINGTON (AP) – The Latest on Congress convening for a new session. (All times EST):

Rep. Paul Ryan, R-Wis., has been re-elected to serve as speaker of the House of Representatives during the 115th Congress, gaining 239 votes.

Ryan, 46, will serve his first full term as speaker after succeeding John Boehner in October 2015. Tuesday’s vote comes with little of the drama that accompanied Boehner’s election two years ago when 25 House Republicans voted for someone other than Boehner.

Ryan will lead the GOP charge to repeal President Barack Obama’s signature health insurance law and cut taxes and regulation.

Democrats nominated Rep. Nancy Pelosi of California for speaker. She received 189 votes and will serve as House minority leader. Rep. Tim Ryan of Ohio gained two votes, while Reps. Jim Cooper of Tennessee, John Lewis of Georgia and Daniel Webster each gained a vote.

Senate Republicans have already introduced legislation that’s a precursor to repealing much of the Affordable Care Act.

Successful passage of the measure would allow a detailed follow-up repeal bill to pass through Congress without fear of a filibuster by Senate Democrats. Tuesday’s measure doesn’t contain any policy language.

Repealing President Barack Obama’s signature health care law is the top priority of President-elect Donald Trump and his GOP allies on Capitol Hill.

The measure directs top congressional committees to cast votes to assemble the repeal legislation by Jan. 27. That means there’s no time for trying to add legislation to replace so-called Obamacare.

The measure is officially called a budget resolution. Senate debate begins this week and the House is likely to follow next week.

The Republican chairman of the Senate Foreign Relations Committee says confirmation hearings for Rex Tillerson, Donald Trump’s pick for secretary of state, will begin next week. The hearings are expected to last two days.

Speaking with reporters Tuesday, Sen. Bob Corker of Tennessee says the first session with Tillerson, the Exxon Mobile CEO, is tentatively scheduled for Jan. 11, with a follow-up hearing on the afternoon of Jan. 12.

Corker says he was meeting with Tillerson Tuesday afternoon. Corker says the committee will receive very soon a detailed financial disclosure statement from Tillerson, who worked at Exxon Mobil for 43 years.

The New Senate has been sworn in.

Seven new members of the Senate joined those who won re-election in receiving the oath of office from Vice President Joe Biden. Biden is the president of the Senate until Donald Trump becomes president Jan. 20. Then Mike Pence will take over.

Each senator was joined at the dais by current and former senators. They then took their new desks and chatted with fellow lawmakers.

There are two new Republican senators and five Democrats. The Republicans are Indiana Sen. Todd Young and Louisiana Sen. John Kennedy. The Democrats are Nevada Sen. Catherine Cortez Masto, Maryland Sen. Chris Van Hollen, New Hampshire Sen. Maggie Hassan, California Sen. Kamala Harris and Illinois Sen. Tammy Duckworth.

Duckworth, a double-amputee Iraq war vet, walked to the dais and stood for the oath.

Former Vice President Dick Cheney and former Defense Secretary Leon Panetta are among those attending the opening session of the 115th Congress.

Cheney’s daughter, Liz Cheney, was sworn in Tuesday to Wyoming’s lone House seat, which her father also held before becoming defense secretary and later vice president.

Panetta’s son Jimmy Panetta captured a California seat once held by his father, who later became CIA director and defense secretary.

House Republicans have dropped plans to gut the independent ethics office after widespread criticism and questions from President-elect Donald Trump about GOP priorities.

In a reversal, the House GOP decided on Tuesday to strip the provision from a package of rule changes that lawmakers will vote on later in the day.

Said Rep. Tom Cole of Oklahoma: “People didn’t want this story on opening day.”

House Republicans had voted Monday night to change the rules.

The 115th Congress has been gaveled into session. The House convened at noon Tuesday, with 241 Republicans and 194 Democrats. Among the members are 52 freshmen.

Lawmakers will soon vote on who will serve as House speaker with Rep. Paul Ryan, R-Wis., expected to win his first full term as speaker. They will then participate in a swearing-in ceremony.

The festive opening included dozens of children, dressed in their Sunday finest, sitting in the House chamber to watch the ceremony. Among the guests were former Vice President Dick Cheney, who is watching his daughter Liz, take the oath of office as the representative for Wyoming.

Republicans are focused on repealing President Barack Obama’s signature health insurance law, rolling back regulations and cutting taxes. They’ll have an easier go of it in the House, with Democrats looking to the Senate to block legislation they view as unpalatable.

A coalition of government watchdogs and scholars is expressing concern about a vote by House Republicans to gut the independent Office of Congressional Ethics.

The groups, including Common Cause, Citizens for Responsibility and Ethics in Washington and Judicial Watch, say in a letter to House leaders that the ethics office has strengthened congressional accountability since its creation in 2008.

The letter says the ethics office “has helped change a secretive and oft-perceived moribund ethics enforcement process” into one that is more accountable, active and bipartisan.

The letter comes after GOP House members voted behind closed doors Monday to give lawmakers themselves ultimate control over the ethics office, which was created after several bribery and corruption scandals sent lawmakers to prison.

Scholars including Norman Ornstein and Thomas Mann also signed the letter.

President-elect Donald Trump is questioning the move by House Republicans to gut the Office of Congressional Ethics, arguing that tax reform and health care should be higher priorities.

In two tweets on Tuesday, Trump reacted to the closed-door vote of Republicans to put the independent OCE under the auspices of the lawmaker-run House Ethics Committee.

Trump’s first tweet said, “With all that Congress has to work on, do they really have to make the weakening of the Independent Ethics Watchdog, as unfair as it.”

He followed up with a second that said. “Focus on tax reform, healthcare and so many other things of far greater importance! #DTS”

The House is slated to vote on Tuesday on the rules changes.

Senior House Republicans say a vote is scheduled for Thursday on a measure that reaffirms U.S. support for Israel after the Obama administration refused to veto a United Nations resolution criticizing the Middle East ally on settlements.

Majority Leader Kevin McCarthy and Rep. Ed Royce, the chairman of the House Foreign Affairs Committee, said in a statement that the administration “has lost all credibility when it comes to Israel.”

Secretary of State John Kerry said in a speech last month that the U.S. was standing up for a two-state solution when it abstained on the resolution, which declares the settlements on the West Bank and east Jerusalem a violation of international law.

McCarthy and Royce called the abstention a “stunt” that “hurt our ally Israel and made peace in the region even more difficult to achieve.”

Senate Minority Leader Chuck Schumer is pledging to hold President-elect Donald Trump and congressional Republicans to account – and warning against a “Twitter presidency.”

The New Yorker says Senate Democrats will hold Trump to his promise to “Make America Great Again” – as long as that means creating jobs, raising incomes, giving real opportunities to the disadvantaged and protecting civil rights.

But Schumer says, “We’ll fight him tooth and nail when he appeals to the baser instincts that diminish America and its greatness.”

The newly elevated Senate Democratic leader says the issues confronting America are so complex that “we cannot tweet them away.”

Schumer’s comments come in prepared remarks he is delivering later Tuesday as Congress convenes for its first session of 2017.

Members of the 115th Congress will be sworn in at noon Tuesday, setting off an aggressive campaign by Republicans who control the House and Senate to dismantle eight years of President Barack Obama’s Democratic policies.

The first and biggest target is Obama’s health care law, which Republicans have long sought to gut and blamed as a primary cause for a lackluster economic recovery. But decades-old programs that millions of Americans rely on every day, such as Social Security and Medicare, also will be in the crosshairs as congressional Republicans seek to shrink both the size of the federal budget and the bureaucracy in Washington.

House Majority Leader Kevin McCarthy, a California Republican, says that “we have a lot to do – and a lot to undo.”
The United States House of Representatives pass a bill ending Dodd–Frank regulations. The bill now goes to the Senate where it is expected to not go through.