CHOICE Act Demonstrates Banking Industry’s Muscle

Banks are supposed to protect people’s money, and politicians are supposed to represent people’s interests. But a bill which passed the House of Representatives last week would put people’s savings in jeopardy, enrich the banks, and fatten the campaign chests of its congressional supporters.

By passing the “Financial CHOICE Act of 2017” House members blessed bank practices that also could lead to a repeat of the near-disaster the economy suffered in 2008.

Records compiled by the Center for Responsive politics show that the campaigns of 15 co-sponsors of “CHOICE” collected a total of $2.5 million from the commercial banking industry in the 2016 campaign, part of the $4.6 million the industry invested in all congressional candidates last year.

The campaigns of several CHOICE co-sponsors, including Reps. Patrick McHenry, R-NC, Blaine Luetkemeyer, R-MO, Steve Stivers, R-OH, Edward Royce, R-CA, and Lee Zeldin R-NY, each received more than $199,000 from banking-related industries.

The 233-186 House vote on Thursday sent the bill to the Senate, where it is not expected to fare as well.

The “CHOICE” bill would relax “Dodd-Frank” regulations adopted after the 2008 financial crash to ensure that banks protect their depositors’ money.

Supporters say the bill would allow banks, big and small to grow freely. “[Banks] are being crushed by costly rules imposed on them by Dodd-Frank” House Speaker Paul Ryan said during Thursday’s debate; “ultimately, the Financial Choice Act is a jobs bill.”

Political committees affiliated with Speaker Ryan received $339,000 from commercial banks in the 2015-16 election season.

Congress passed the “Dodd-Frank Wall Street Reform and Consumer Protection Act” in 2010 as a reaction to the financial crisis of 2008. It’s sponsors, Rep. Barney Frank, D-MA, and Sen. Christopher Dodd, D-CT, wanted to prevent a future meltdown by regulating loan practices that allow banks to risk depositors’ money for their own gain. Those practices are widely credited with triggering the financial collapse and subsequent Treasury Department bailout of major banks in 2008 and ‘09.

The CHOICE Act “eliminates […] key reforms specifically designed to prevent another bailout,” said John Crane a former deputy assistant secretary of the treasury. It “would invite future bailouts, not prevent them,” he asserted.

Speaker Ryan, whose top financial contributor is Bank of America, scheduled the CHOICE vote on a day when the nation’s attention was focused on former FBI Director James Comey’s Senate testimony about President Trump and Russia’s attempt to interfere with the 2016 election.

But while Ryan’s move probably minimized press coverage of CHOICE and the risks that go with it, the CHOICE Act’s backers are unlikely to have such a compelling event to distract reporters and the public if the bill reaches the Senate floor.