House lawmakers started the new year off divided on Wednesday, with Democrats ultimately defeating a package of financial services measures that included relief from a key Dodd-Frank Act rule.
The focus of the 11-bill package was on a two-year delay for banks to sell off millions of dollars' worth of certain collateralized loan obligations under the Volcker Rule. The measure would push the compliance deadline to July 2019, and follows an earlier two-year delay on legacy CLOs granted by regulators last spring through July 2017.
But critics warned that the move is part of a larger push to undermine the financial reform law, sparking heated debate during Congress's first week back in the new term.
The package is a "Wall Street wish list," said House Minority Leader Nancy Pelosi, D-Calif., in a statement Wednesday afternoon. "The Republican package represents a brazen attempt to dismantle essential Wall Street reforms and sneak through a New Year's present to big banks."
The legislation comes on the heels of another divisive battle in the House during last year's lame duck session, when Democrats objected to the rollback of a Dodd-Frank provision requiring banks to push out certain swaps from depository institutions and into affiliates.
That measure — which was included in a larger spending deal — ultimately passed. But it led to a series of negative headlines for the megabanks, who were the beneficiaries. The same rhetoric has extended into the battle this week, and it's likely that the earlier fight helped unify Democrats this time around.
"I am very pleased that House Democrats joined together to successfully fight against this Republican effort, a strong rebuke to their strategy of moving controversial legislation in the dead of night," Rep. Maxine Waters, D-Calif., ranking member on the Financial Services Committee, said in a statement after the vote.