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Creatively-named Congressional bill offers financial choices, but for bankers, not bank customers

The Financial Choice Act is a third of the way to becoming law. Want to take a guess as to what it might do?

It obviously deals with money. But it's about giving more choices to financial institutions, not to consumers.

Wall Street street signs

The Financial Choice Act essentially seeks to roll back much of the Dodd-Frank Act, one of President Barack Obama's signature accomplishments.

The current law, enacted in 2010 and whose full, official Dodd-Frank Wall Street Reform and Consumer Protection Act moniker comes from its former U.S. Senate champions Chris Dodd of Connecticut and Barney Frank of Massachusetts, was created to help protect individual investors.

Undoing Dodd-Frank: But the Financial Choice Act, which passed the U.S. House on Thursday, June 8, without a single Democratic vote, would do away with many Dodd-Frank restrictions imposed on financial institutions following the 2007-2008 financial crisis and subsequent recession.

The proposed changes include:

  • Some financial institutions would no longer have to meet capital and liquidity requirements that limit risk taking. This part of Dodd-Frank is known as the Volcker Rule, which bans banks from trading for their own gain and limits ownership in hedge funds and private equity.
  • Dodd-Frank's orderly liquidation authority that deals with failing banks would be replaced with a new bankruptcy code provision.
  • The Financial Choice Act also would weaken a key Obama Administration accomplishment, the creation of the Consumer Financial Protection Bureau (CFPB). The proposed law would let a president fire the agency's director at will and its oversight powers would be curbed.

Democrats on Capitol Hill quickly and repeatedly slammed GOP-designed bill as one that gives all the choices to Wall Street while taking away consumer financial safeguards.

Enactment of the Financial Choice Act isn't a foregone conclusion. The bill still must clear the Senate, where it's sure to face stiff opposition led by Massachusetts Democratic Sen. Elizabeth Warren. If it does pass the Senate, step three is to the White House for the president's signature.

A bill by any other name…: Would the Financial Choice Act have sailed through the House if it were named the Wall Street Handout Act? Probably, given the Republican-controlled Congress' longstanding goal to kill Dodd-Frank.

But the name Financial Choice Act sure puts a different slant on the bill, especially for those who don't want to dig into the details of this measure or the law its supporters are hoping to supplant.

Such inventive naming of bills is not unusual. In fact, it seems to be a requirement in today's legislative world.

I get it. Turning legislation into actual law is tough. Bill sponsors find that the process also includes a fair amount of marketing, to their constituents, the media and their House and Senate colleagues.

A catchy title for a bill is a good first step. Heck, a patriotic-sounding nickname or acronym can earn a questionable piece of proposed policy some favorable attention and maybe even help it pass.

But c'mon, Representatives and Senators, get real. Really. We, your constituents who ultimately pay for your proposals (creatively named or otherwise) with our tax dollars want — deserve! — some truth in legislative naming.

It's called what? In past Congressional sessions we've had such bills as the HAPPY Act of 2009, which proposed a tax deduction for pet care expenses. That bill's joyful name came from its title, the Humanity and Pets Partnered Through the Years Act.

On the eve of social media giant Facebook's initial public offering in May 2012, Democratic Sens. Charles Schumer of New York and Robert Carey of Pennsylvania introduced a bill to make tax-motivated expatriates pay more than they already do. The impetus was the revelation that Facebook co-founder Eduardo Saverin, then a resident of Singapore, could escape an estimated $67 million Internal Revenue Service bill.

Schumer and Carey called their proposal the Ex-PATRIOT Act. That love-of-USA acronym comes from its full name, the Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy Act. OK. I mean okay.

In this current 115th Congress we've seen H.R. 32, aka the ROSIE Act. The acronym stands for Realizing Opportunity for Spouses in Employment. It also brings to mind the World War II patriotic workplace efforts of the many Rosie the Riveters and other women who so ably filled jobs left by men who joined the armed forces.

More recently, Donald J. Trump's first budget proposal as our 45th president is named The New Foundation for American Greatness. As blog reader M. Woodruff and fellow tax blogger at Mighty Taxes notes:

How could anyone question the "The New Foundation for American Greatness"? Got to love the patriotic / Orwellian names these characters give to their destructive programs. ha ha! (not funny though)

Amen, MW!

Maybe the Trump Administration realized how poorly received the fiscal year 2018 financial document would be and hoped that the rah-rah title would at least get a few folks to give it the benefit of the doubt.

More acronym acrobatics: Finally, if the HAPPY and Ex-PATRIOT acts weren't enough to convince you that lawmakers (or at least their staffers) come up with catchy acronym initials first and then work backward for a bill's name, we have the SWAMP Act.

This bill, introduced in May by Trump Twitter nemesis Rep. Ted Lieu (D-California), plays off the president's campaign pledge to drain the swamp of D.C. politics-as-usual once he moved into the Oval Office.

Lieu's SWAMP Act is formally titled the Stop Waste and Misuse by the President Act.

If passed, taxpayers would be reimbursed for the millions of dollars spent on Trump's trips to his own properties, including Mar-a-Lago, or the Winter White House as he's renamed it.

The bill, H.R. 2414, is pending in two House committees, the Judiciary and the Oversight and Government Reform. Don't expect any action soon ever in the GOP-controlled House.

But Lieu, like his colleagues and even the White House, made his point simply by introducing his creatively named bill.

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Missy@ Mighty Taxes

Great post, Kay! love it. Reminds me of G.W. Bush's "Clear Skies" program to benefit the coal industry. We should just go ahead and rename the "Defense Department," the "Ministry of Love" while we're at it. ugh!

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