The Washington Wrap is a weekly look at regulation, news and chatter from the Capitol. Send tips and ideas to brian.cheung@spglobal.com and polo.rocha@spglobal.com.
On Capitol Hill
After six days of legislative work on the floor of the U.S. Senate, 17 Democrats joined Republicans in passing a package bill that revises large swaths of the post-crisis Dodd-Frank financial regulatory framework. With the White House already articulating support for the bill, one hurdle remains: House Financial Services Committee Chairman and Texas Republican Jeb Hensarling.
Hensarling, who had originally tried to fast-track legislative passage by negotiating House-approved provisions into an amendment package on the Senate floor, has made it clear he is not satisfied with the Senate's finished product.
"I look forward to combining [the Senate package] with our helpful House bipartisan banking bills and getting that combined bill to the President's desk," Hensarling said in a statement March 14.

The more conservative House would like to see more dramatic pullbacks in Dodd-Frank regulations. Hensarling's gold standard for financial regulation is the CHOICE Act, which includes legislative text that would strike out entire portions of the Dodd-Frank law. But Hensarling is walking a tight rope; amending the Senate bill with provisions that more aggressively roll back Dodd-Frank regulations could force Senate Democrats to withdraw their support.
For example, Hensarling wants a five-point risk-based assessment to label companies as systemically important. But Senate Banking Committee Chairman Mike Crapo, R-Idaho, has made it clear that a risk-based assessment could not get bipartisan support, adding that a $250 billion threshold was ultimately the best middle ground. Crapo and Senate Majority Leader Mitch McConnell, R-Ky., were so eager to preserve Democratic support that they blocked all of the 161 filed amendments from consideration.
The Senate Democrats that helped engineer the bill warned Hensarling not to try anything crazy.
"I think that the question is whether you're going to let perfect be the enemy of good," Sen. Heidi Heitkamp, D-S.D., said March 14.
Hensarling could steer the bill through the House a couple ways: pass the bill as the Senate has it, make amendments and send the bill back to the Senate or force the formation of a conference committee to resolve differences between the two chambers.
The House has not yet scheduled proceedings on the Senate bill, and spent most of this week working through separate bills from the House Financial Services Committee, which will likely be used as chess pieces in Hensarling's coming negotiations with the Senate. On March 14, the House passed a bill that would require federal banking regulators to consider the risk profile and business model of a community bank or a credit union when taking regulatory action.
On March 15, the House passed two more bills: one requiring the formation of an "Office of Independent Examination Review" to oversee the regulators' exam processes and another raising the amount of capital that companies can raise under a "mini-IPO" as permitted by the Securities and Exchange Commission.
At the Fed
The search committee tasked with finding a replacement for retiring New York Fed President William Dudley has narrowed its list of candidates to a handful, the committee's co-chairs said March 16.
Meanwhile, the Financial Times reported that the Trump administration is considering nominating the Federal Reserve's Vice Chairman for Supervision Randal Quarles to become the new chair of the international Financial Stability Board, though his candidacy could spark concerns from other member countries.
Other News
A federal court on March 15 vacated the U.S. Labor Department's fiduciary rule requiring brokers to commit to their clients' best interests ahead of their own. The court found that the rule's additional requirements on charging "reasonable" fees burdens financial advisers with "a web of duties and legal vulnerabilities."
The United States Court of Appeals for the Fifth Circuit's decision reverses a lower district court ruling. The Labor Department had previously delayed the implementation of the rule to July 1, 2019, from Jan. 1, 2018.

