Transition Tracker | Senator Pat Toomey on Dodd-Frank Reform

WHAT HAPPENED

Sen. Pat Toomey (R-PA), the chairman of the Subcommittee on Financial Institutions and Consumer Protection, told Politico Pro Monday that one possibility for Dodd-Frank reform would be to employ a budget procedure known as "reconciliation."

Toomey elaborated, “The first step in the process is a very simple one. It’s just a matter of having a budget resolution. This wouldn't be the first one we’d do next year. That one’s dedicated to the repeal of Obamacare. We intend to do a second budget resolution, which would give us reconciliation instructions to do other things …. My contention is we should simply include instructions to various authorizing committees, one of which would be the Banking Committee, to reduce the deficit by some amount. The budget resolution doesn’t have to be any more precise than that with respect to those instructions to a given committee.”

WHAT IT MEANS FOR AFSA MEMBERS

Unlike most legislation, a budget resolution only needs 51 votes, not 60, to pass the Senate

Toomey specified, “There's a long list of provisions in Dodd-Frank that would qualify for reconciliation treatment. My preference is to do this with bipartisan support and have Democrats working with us on this. But I’m not naive. And the incoming minority leader is on record saying that they have the votes to deny us the ability to roll back Dodd-Frank. So, they’re sending a pretty clear signal about how enthusiastic they are about working with us. That might change. It might not. But in any case, we ought to have the tools available to us under the existing law and Senate rules to roll back some of the enormous damage that Dodd-Frank is doing.”

Toomey thinks that the CFPB’s budget – which is $6 billion dollars over 10 years – would easily qualify for a budget resolution.

“We could make some significant changes to CFPB that would save a lot of money and I think that would qualify,” Toomey said, adding, “The Office of Financial Research, over a billion dollars a year for a bunch of duplicative research that multiple other financial regulators already do …. There's a lot of money that can be saved there. It's easy to identify a handful of obvious candidates and I think there are many more.”

Toomey said that he has discussed his idea with Senate Banking Chairman Mike Crapo (R-ID). While it is unclear if Sen. Crapo embraces this approach, he remains dedicated to significantly reforming Dodd-Frank.

WHAT IS AFSA DOING

AFSA is meeting with Senate Banking staff, as well as Sen. Toomey’s office, to discuss reforms to Dodd-Frank, including supporting bringing the CFPB under Congress’ control.