Members of the House Financial Services Committee have found themselves at a disagreement just days into the new session of Congress.
Rep. Maxine Waters (D-Calif.), the new ranking member of the HFSC, said that she is “hopeful” she will be able to coordinate with Rep. Jeb Hensarling (R-Texas), the committee’s new chairman, but added that he made “questionable assertions” about Dodd-Frank. Waters called for a “fair representation of the facts” in the future, according to The Hill.
Hensarling released a statement on Tuesday announcing subcommittee assignments, though his statement also said that Dodd-Frank “enshrined a ‘too big to fail’ bailout scheme into law,” according to The Hill.
Republicans have remained critical of a Dodd-Frank provision that labels large firms as “systemically important,” which they maintain bestows firms with the label of “too big to fail” and provides a government guarantee.
Waters, however, recently said that one of her top priorities is to protect Dodd-Frank from efforts by critics to water down the controversial law. In response to Hensarling’s statement, Waters said that Dodd-Frank may identify such firms but added that the legislation also includes a number of mechanisms designed to wind down a failing financial firm, which would eliminate shareholders and lead to the firing of the firm’s top executives.
“The point of this process is to allow institutions to fail without causing catastrophic damage to the larger economy, other companies, small businesses, American taxpayers and American families,” Waters said, The Hill reports.
Many Democrats have insisted that the law ends America’s “too big to fail” problem, but Dodd-Frank critics maintain that megabanks have only gotten larger since the recent financial crisis.
Some officials and lawmakers, including Dallas Federal Reserve Bank President Richard Fisher, as well as Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.), have called for a break-up of the largest banks as a solution to the “too big to fail” problem, according to The Hill.
Waters said that, in spite of ideological differences, she remains hopeful that she and Hensarling will be able to work together in the future.
“I appreciate the bipartisan nature of today’s Financial Services Committee markup…” Waters said, The Hill reports. “I am hopeful that it will set the tone of our future work together.”