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Dodd-Frank revision bill may be delayed, House wants bigger changes

The U.S. House of Representatives may trip up Senate efforts to pass a bipartisan legislative package to revise large swaths of the Dodd-Frank post-crisis financial regulatory framework, by splicing more aggressive provisions into the package the Senate passes and therefore forcing formal conference to reconcile the two chambers' differences.

A House GOP aide said the plan is to vote to go to conference with the Senate bill and the Financial CHOICE Act, which is the House Financial Services Committee's package legislation that promises an off-ramp to Dodd-Frank regulations for institutions of all sizes, as long as they meet a 10% leverage ratio.

The Senate bill, which proposes more tailored relief primarily for community banks and large regional banks between $50 billion and $250 billion in assets, is now in danger of losing the 12 Democrats and 1 Independent currently signed onto the bill as co-sponsors.

The House and Senate had originally hoped to negotiate the addition of House provisions through the backdoor creation of a manager's amendment that would revise the legislative package. A substitute amendment introduced March 7 was able to add at least eight House provisions to the bill, including a clarification of the capital treatment of high-volatility commercial real estate and a number of proposals concerning access to capital.

But the House did not appear satisfied with the changes. House Financial Services Committee Chair Jeb Hensarling, the Texas Republican who has been leading the discussions in the lower chamber, released a list of 29 other bills minted by his committee that "were curiously left out."

A spokesperson for Hensarling later clarified that "we're not making demands on the Senate bill," hinting that the House could go to conference and require the formation of a formal committee to get both chambers on the same page, which would extend the legislative timeline to passage.

The challenges with the House come as the Senate also tries to clear the hurdle of negotiating the number of amendments permitted for floor debate. Sen. Sherrod Brown, an Ohio Democrat opposed to the bill, said March 12 that negotiations are ongoing over which of the 161 filed amendments Senate Majority Leader Mitch McConnell, R-Ky., will allow for consideration.

The bill is now extending into its fifth legislative day, and the lawmakers in support appear anxious to pass the package through the Senate and let the House proceed as it will.

"I think the bill is solid as it is," Sen. Tim Kaine, a Virginia Democrat who is co-sponsoring the legislation, said in an interview March 12.

Kaine expressed some disappointment that Democrats in opposition to the bill may be delaying the process, but said he advocates for an open amendment process that would allow for tweaks. Kaine himself filed an amendment that would narrow the Home Mortgage Disclosure Act reporting exemption threshold for low-volume originators of closed-end mortgages and open-end lines of credit, from 500 to 100.

But Kaine admitted that he prioritizes full passage of the package legislation, adding that "I don't need my amendment to pass" the ultimate bill.