5983 ) was sponsored by Representative Jeb Hensarling, chairman of the House Committee on Financial Services. 10 , FCA) on April 26, 2017. It passed the House on June 8, 2017. The FCA is a wide-ranging proposal with 12 titles that would alter many parts of the financial regulatory system. Many of the provisions can be categorized as providing regulatory relief to financial firms, investors, or borrowers. Many parts of the FCA would repeal or amend provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), a broad package of regulatory reform legislation passed following the 2007-2009 financial crisis that initiated the largest change to the financial regulatory system since at least 1999 (see Appendix A ). This report highlights major policy proposals in the version of the bill as passed in the 115 th Congress, but it is not a comprehensive summary of the bill. The FCA would provide regulatory relief to two broad categories—banks and securities markets' participants. Many would modify or repeal rules stemming from the Dodd-Frank Act, whereas others target long-standing regulatory practices. Provision in the FCA

Under the FCA, a banking organization could choose to be subject to a higher, 10% leverage ratio, and in exchange would be exempt from risk-weighted capital ratios; liquidity requirements; stress-test requirements; certain merger, acquisition, and consolidation restrictions; limitations on dividends; and other regulations. A bank would have the option to follow current regulatory requirements or this new regulatory approach. For example, banks opting in to the new leverage ratio approach would be exempt from the Dodd-Frank Act's enhanced prudential regulations for banks with $50 billion or more in assets and other regulations based on financial stability considerations (discussed in " Regulating Systemically Important Financial Institutions and Limiting Their Size "). Designation process. If the latter, then SIFI regulation is unlikely to contain systemic risk. Thus, congressional control over an agency's funding reduces its independence from (and increases its accountability to) Congress. Some also cite funding that is outside the traditional appropriations process as a contributing factor to the CFPB's independence. Similar to the CFPB, the CLEA would be headed by a single director, but unlike the CFPB director, who can only be removed by the President for cause, the CLEA director would be removable at-will by the President. The provision would also require the Fed to calculate a traditional Taylor Rule (called the "Reference Policy Rule" in the bill) and compare it to the Directive Policy rule. further restrict the Fed's emergency lending powers. The APA contains rulemaking requirements and procedures for agency adjudications, and it provides for judicial review of rulemaking and agency actions. H.R. De novo review would require courts to independently interpret a covered agency's statutory authority, rather than deferring to that agency's reasonable interpretation of the law. Policy Issues190

The way in which federal financial regulators exercise their enforcement powers requires a balance between protecting consumers and investors from unlawful conduct, on the one hand, and ensuring that law-abiding financial institutions are not pushed out of certain markets and the costs of their products and services for consumers and investors are not unduly increased, on the other. For example, the FCA would increase the maximum civil penalties that could be assessed for violations of various laws, including Section 8A of the Securities Act of 1933 and Section 951(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. Provisions of the Financial CHOICE Act Included in FY2018 Appropriations Bills
Selected provisions of the Financial CHOICE Act were included in the FY2018 Financial Services and General Government Appropriations Act (H.R. 3354 as passed by the House on September 14, 2017. First, H.R. Second, H.R.
The Financial CHOICE Act (FCA; H.R. 10) was introduced on April 26, 2017, by Representative Jeb Hensarling, chairman of the House Committee on Financial Services. It passed the House on June 8, 2017. Selected provisions of H.R. 10 were then added to the appropriations bill passed by the House (H.R. 3354).
H.R. 10, as passed, is a wide-ranging proposal with 12 titles that would alter many parts of the financial regulatory system. Much of the FCA is in response to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act; P.L. 111-203), a broad package of regulatory reform following the financial crisis that initiated the largest change to the financial regulatory system since at least 1999. Many of the provisions of the FCA would modify or repeal provisions from the Dodd-Frank Act, although others would address long-standing or more recent issues.
This report highlights major proposals included in the FCA but is not a comprehensive summary. In general, the bill proposes changes that can be divided into two categories: (1) changes to financial policies and regulations and (2) changes to the regulatory structure and rulemaking process.
Major policy-related changes proposed by the FCA include the following:
Leverage Ratio—allowing a banking organization to choose to be subject to a higher, 10% leverage ratio in exchange for being exempt from risk-weighted capital ratios, liquidity requirements, enhanced prudential regulation (if the bank has more than $50 billion in assets), and other regulations. Regulatory Relief—providing regulatory relief throughout the financial system to banks, consumers, and capital market participants, including by repealing the Volcker Rule, fiduciary rule, and risk retention requirements for nonmortgage asset-backed securities. Some provisions are targeted at small financial institutions or issuers, whereas others provisions are applied across the board. Too Big To Fail—repealing the designation of systemically important nonbank financial institutions, repealing or restricting authority to provide emergency assistance to financial markets, and replacing an option for winding down systemic institutions with a new chapter in the Bankruptcy Code that is tailored to financial firms.
Structural and procedural changes that affect the balance between regulator independence from and accountability to Congress and the judiciary include the following:
Funding—subjecting regulators that currently set their own budgets to the traditional congressional appropriations process. Rulemaking—requiring regulators to perform more detailed cost-benefit analysis when issuing new rules and to use cost-benefit analysis to review existing rules, as well as requiring congressional approval for a major rule to come into effect. Judicial Review—requiring courts to apply a heightened judicial review standard for agency actions taken by financial regulators rather than applying varying levels of deference to the agencies' interpretations of the law. Enforcement—increasing the maximum civil penalties that could be assessed for violations of certain banking and securities laws and restraining certain agency enforcement powers. CFPB—replacing the Consumer Financial Protection Bureau with the Consumer Law Enforcement Agency and modifying its powers, leadership, mandate, and funding. The new agency would not have the CFPB's examination or supervisory powers, but would have similar enforcement powers. Its director would be removable at-will by the President. Federal Reserve—requiring a GAO audit of the Fed, restricting emergency lending, and requiring the Fed to compare its monetary policy decisions to a mathematical rule.