washington<u+2014>congressional republicans hope to scrap two contentious rules meant to rein in conflicted investment advice and payday lenders once president-elect donald trump takes office. however, despite the republicans<u+2019> big election victory that will keep both chambers of congress under gop control, the party<u+2019>s path to legislating still faces the hurdle of a democratic filibuster, among other factors house financial services committee chairman jeb hensarling (r., texas) said wednesday that talks were being held with mr. trump about uprooting a labor department rule regulating how brokers sell retirement investments and a consumer financial protection bureau proposal aimed at holding down interest rates and increasing disclosures for small-dollar loans. mr. hensarling, who is under consideration to become treasury secretary in the trump administration, said both rules were cleared by agencies, not congress. <u+201c>these are just two examples of rules promulgated by the unelected and the unaccountable,<u+201d> mr. hensarling told the exchequer club in washington.<u+00a0><u+201c>these are just two rules that hurt struggling citizens. and these are two examples of rules the house financial services committee, working with a president trump, hopes to reverse.<u+201d> mr. hensarling has led the house gop effort to revamp the 2010 dodd-frank regulatory-overhaul law adopted after the financial crisis. in addition to his own financial choice act, mr. hensarling is supporting a range of legislation, including bills addressing home loans, restructuring federal financial regulators including the cfpb and prescribing how the federal reserve should explain monetary policy to the public. he also called for stripping the financial stability oversight council of its power to designate financial institutions as systemically important. <u+201c>i do not believe that fsoc is adding value to our economy,<u+201d> mr. hensarling said. the lawmaker said he has been in discussions with mr. trump and his transition team about the choice act in recent months. while mr. trump has <u+201c>not expressly endorsed the choice act<u+2026>he was very favorably disposed to it,<u+201d> mr. hensarling said. and <u+201c>he<u+2019>s very well spoken on his desire to get rid of dodd-frank.<u+201d> the choice act is meant to replace dodd-frank with an approach that would be friendlier to the banking industry. asked about the timeline for passing the choice act, mr. hensarling said he was <u+201c>cautiously optimistic<u+201d> that the full house would vote on it <u+201c>fairly early in the next congress.<u+201d> other observers, however, challenged republicans<u+2019> views that they could replace dodd-frank under the next gop-led congress and administration, mainly because of the potential for a filibuster. <u+201c>as long as the filibuster still exists, massive reforms are not going to happen<u+201d> so making <u+201c>major changes to dodd-frank<u+2014>it just seems to be an agenda without an endgame,<u+201d> said jaret seiberg, an analyst at cowen & co. republicans would have to break through a wall of democrats backing sen. elizabeth warren (d., mass.), who helped launch the cfpb and has been a staunch advocate of keeping dodd-frank intact. <u+201c>it is foolish for any democrat to think that weakening our support for the cfpb is good for the country or good for us as a party,<u+201d> wrote ms. warren in a facebook post nov. 13. <u+201c>turning our back on consumers<u+2014>and on our core, fundamental values<u+2014>is a path toward ruin.<u+201d> mr. seiberg said that ms. warren<u+2019>s <u+201c>power is certainly diminished<u+201d> in light of the recent election results that placed the gop in the lead. <u+201c>yet the democrats that are there are progressives and i think they are not going to want to support radical changes,<u+201d> he added. sen. sherrod brown of ohio, the top democrat on the senate banking committee, issued a statement late wednesday warning mr. trump not to dismantle the fsoc or its oversight of hedge funds. his remarks came on the same day that the fsoc was holding a meeting at the treasury department. <u+201c>the next treasury secretary should understand that any actions to undermine that vital oversight mission could threaten our ability to address risky wall street practices, leaving taxpayers and our economy vulnerable to another crisis,<u+201d> mr. brown said. <u+201c>if president-elect trump is serious about stopping wall street and hedge funds from <u+2018>getting away with murder,<u+2019> he<u+2019>ll make sure the council can keep doing its job.<u+201d> mr. hensarling said he was <u+201c>certainly willing to negotiate in good faith on any proposal<u+201d> that comes before the financial services committee. <u+201c>even though republicans will be nominally in charge of both ends of pennsylvania avenue soon, i remain painfully aware of the senate<u+2019>s cloture rules,<u+201d> mr. hensarling said, referring to the 60 votes needed to overcome a filibuster in the upper house. <u+201c>that means there will continue to be a need to work with the other party.<u+201d> the house financial services committee is going through some leadership changes for the next congress. mr. hensarling said interviews would be conducted next week. <u+201c>stay tuned,<u+201d> he said. the labor department unveiled the <u+201c>fiduciary rule<u+201d> in april, saying it would eliminate conflicted advice that has cost american families $17 billion a year and pushed down their annual returns on retirement savings by a percentage point. while several financial-industry leaders have disputed those figures, saying they are too high, firms such as bank of america corp. <u+2019>s merrill lynch have embraced the notion of a higher standard for its broker force. wall street firms have already spent millions of dollars to comply with the regulations, and the labor department estimated industrywide costs would reach $5 billion in the rule<u+2019>s first year. still, brokerages and asset managers stand to benefit from the rule<u+2019>s dismantling since sweeping changes that would have eliminated some sales commissions around retirement accounts wouldn<u+2019>t go into effect. researcher morningstar inc. estimated the rule would affect about $19 billion in annual brokerage revenue alone. write to rachel witkowski at rachel.witkowski@wsj.com
jeb hensarling says gop wants to end rules on retirement advice and payday loans  - wsj
rachel witkowski