This week: Congress takes up banking reform as gun debate stalls

The Senate is turning to banking reform this week as a push on gun control appears stalled with no clear path forward.

The financial legislation will bring Congress another step closer to passing its first rewrite of the Dodd-Frank banking reform bill, which was enacted nearly eight years ago.

Senate Majority Leader Mitch McConnell (R-Ky.) teed up the legislation late last week and debate on the bill in the coming days is expected to eat up the chamber’s work week.

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The bill will provide smaller institutions and community banks relief from regulations and rules established under Dodd-Frank, which they argue made them less competitive. 

The bill raises the threshold at which a bank is deemed big enough to warrant tighter oversight from $50 billion to $250 billion, exempting dozens of regional banks from stringent rules.  

Banks with less than $250 billion that aren’t otherwise targeted by the Federal Reserve would no longer be subject to yearly stress tests or higher capital requirements. Those banks will also be freed from the requirement to submit a yearly plan on how they would break apart in the event of a failure without triggering a credit crisis.

Under McConnell’s floor maneuvering, an initial procedural vote on the bill is expected on Tuesday, where the legislation will need 60 votes to overcome the hurdle.

The GOP leader has long pointed to the legislation as one of the ways the Senate can focus on bipartisan legislation after Republicans spent most of 2017 pursuing priorities such as a tax overhaul, repeal of ObamaCare and changing the Senate’s rules on Supreme Court nominations.

Though Republicans are united behind the banking reform bill, spearheaded by GOP Sen. Mike Crapo (Idaho), Democrats are divided.

The legislation is expected to ultimately pass because it is supported by a cadre of moderate Democrats, while more progressive members argue it goes too far to deregulate larger financial institutions.

“The Senate – with the support of some Democrats – is set to start debate on a bill to roll back regulations on the same big banks we bailed out a few years ago. If we lose the final vote next week, we’ll be paving the way for the next big crash,” Sen. Elizabeth Warren (D-Mass.) said in a tweet Friday.

Warren, considered a potential 2020 contender, rose through the Democratic Party’s ranks by focusing on financial oversight.

Lisa Donner, the executive director of Americans for Financial Reform, noted late last year that the bill would lift the more stringent oversight requirements for 25 of the 38 largest banks.

But the bill has the support of 12 Democrats, guaranteeing it will be able to pass if, as expected, Republicans remain united.

Five of the 12 Democratic cosponsors are up for reelection in states won by President Trump in 2016, while Democratic Sen. Doug Jones (Ala.) — who isn’t facing reelection until 2020 — is from a deep-red state.

Gun control legislation

Despite calls for action from Trump, as well as top Republicans, Congress’ debate on gun control in recent weeks quickly stalemated.

Last week’s televised White House meeting between Trump and a bipartisan group of lawmakers provided no clear path forward, instead appearing to frustrate conservatives and embolden Democrats.

“I would call that a brainstorming session. It wasn’t legislating 101,” Sen. John Cornyn (Texas), the No. 2 Senate Republican, said when asked if the freewheeling White House meeting made it easier or harder to get a deal.

Lawmakers have introduced or are working on a flurry of proposals following the Parkland, Fla., school shooting, where 17 people were killed. But none, so far, have the 60 votes needed to pass the Senate or majority support in the House.

McConnell, noting the chamber was moving to the banking bill, appeared to leave the door open to returning to the gun control debate if a way forward emerged.

Senate Republicans are lining up behind the Fix NICS (National Instant Criminal Background Check System) Act as the bill most likely to pass the Senate and the chamber’s natural starting point for any debate.

“We’d love to do that at some point,” McConnell told reporters late last week.

But Democrats, while supportive of the bill, believe it is too narrow.

Senate Minority Leader Charles Schumer (D-N.Y.) outlined his caucus’ three-part plan: Requiring background checks for firearms sold over the internet and at gun shows; a debate on the Senate floor on the assault weapons ban; and a bill allowing law enforcement or family members to get a court order to temporarily prevent someone deemed dangerous from getting a gun.

The last idea, known as “red flag” legislation, appears to have bipartisan support. Sen. Marco Rubio (R-Fla.) mentioned it as part of his school safety-focused package last week. Sens. Richard Blumenthal (D-Conn.) and Lindsey Graham (R-S.C.) are expected to introduce similar legislation this week.

House Republicans, meanwhile, have largely focused on school safety following the shooting. And Speaker Paul Ryan (R-Wis.) suggested they would not vote on the assault weapons ban favored by some Democrats.

Energy and environment

The House is expected to vote on a pair of energy and environment bills this week.

The House Rules Committee is scheduled to meet on Monday night on the two proposals: the Blocking Regulatory Interference from Closing Kilns (BRICK) Act and the Satisfying Energy Needs and Saving the Environment (SENSE) Act.

BRICK would exempt certain power plants that burn coal refuse from parts of a major 2012 air pollution rule.

Meanwhile, the SENSE Act would change Environmental Protection Agency regulations to benefit specific industries.

The House is expected to vote on the bills on Wednesday and Thursday, respectively.

Regulations

The House is expected to vote on the Comprehensive Regulatory Review Act on Tuesday.

The measure is aimed at eliminating outdated or unnecessary regulations. The bill would require an audit to be completed every seven years, instead of every 10, and expand the number of financial agencies the review requirements apply to.