Rolling back the Dodd-Frank Wall Street law of 2010 "would be dangerous and irresponsible," said the Democratic chairman of the U.S. Senate Banking Committee on Tuesday.
As Republicans in the U.S. House of Representatives move to weaken and delay key parts of Dodd-Frank, banking panel chairman Tim Johnson made clear that such efforts will face a steep uphill climb in the Democratic-controlled Senate.
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"We cannot allow Dodd-Frank to be dismantled," Johnson said at a hearing focused on the work of an independent commission that investigated the financial crisis of 2007-2009, which prompted the drafting and passage of Dodd-Frank.
"We simply cannot afford to go back to the old financial system that destroyed millions of jobs and cost the economy trillions of dollars," Johnson said.
Republican attacks on Dodd-Frank, coming more than nine months after President Barack Obama signed it into law, are focused on trying to cut funding for the federal agencies that must implement it and, more directly, on specific provisions.
A House panel last week approved a bill that would weaken a new financial consumer protection watchdog being set up under Dodd-Frank. The Consumer Financial Protection Bureau is on track to begin regulating mortgages and credit cards in July.
Republicans, who control the House, consistently opposed most of Dodd-Frank through the debate over it in 2009 and 2010, as did an army of bank and financial services lobbyists.
House Republicans' attempts to roll back the law were not expected to make headway in the Senate. Even if they do, they would likely face a swift veto from Obama, a staunch Dodd-Frank supporter, according to policy analysts.
Senator Richard Shelby, the banking panel's top Republican, called Dodd-Frank "a wish-list of reforms long sought by liberal activists, special interests and federal bureaucrats."
Shelby said the banking committee should have conducted its own investigation of the crisis, rather than assigning that job to the independent Financial Crisis Inquiry Commission (FCIC).
Testifying at the hearing, FCIC Chairman Phil Angelides said the commission conducted a thorough inquiry. The bipartisan commission was unable to issue a unified report, however, with some members issuing their own findings.
None of the commission's findings appeared until several months after Congress approved Dodd-Frank.
"While it is unfortunate that the commission was unable to reach a bipartisan consensus on its final report, it is more unfortunate that, in the end, it did not matter," Shelby said.