The higher energy Jeb

7 June 2016 By Gina Chon Follow @GinaChon

Congressman Jeb Hensarling put forward a radical bill to replace Dodd-Frank with a simple 10 pct leverage ratio, and rein in regulators. That should be music to the ears of the GOP presidential hopeful. It may even put the Texan lawmaker on Trump’s shortlist to run Treasury.

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Texas Congressman Jeb Hensarling on June 7 proposed a radical plan to replace the 2010 Dodd-Frank Act, which was aimed at addressing deficiencies in banking regulation that helped lead to the 2008 financial crisis.

Hensarling, Republican chairman of the House Financial Services Committee, would allow banks to opt out of current capital and liquidity requirements if they meet a 10 percent leverage ratio and have one of the top two ratings in regulatory reviews. The largest eight U.S. banks will have to meet a minimum leverage ratio of 5 percent by 2018, according to rules approved in 2014.

Hensarling’s plan also eliminates the Volcker rule that bans proprietary trading. He would also repeal the Dodd-Frank provision that gives the Financial Stability Oversight Council the power to designate certain non-banks as systemic risks, and revoke the rule that gives the Federal Deposit Insurance Corp the power to resolve a failing bank. The Republican’s proposal leaves bankruptcy as the only option.

Agencies that don’t rely on Congress for budget appropriations, such as the Consumer Financial Protection Bureau, would be reestablished as a commission that would have its expenses subject to lawmaker approval. The plan is called the Financial CHOICE Act, which stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs.

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