US House of Representatives Financial Services Committee Chairman Jeb Hensarling (R-TX) introduced a modified version of the financial regulatory reform legislation that he introduced in the last Congress.  Among other things, the new CHOICE 2.0 includes certain stress test reforms, including: (i) requiring only an annual company-run Dodd-Frank Act test; (ii) changing the Federal Reserve Board’s annual Comprehensive Capital Analysis and Review (CCAR) to a two-year cycle; (iii) expanding the Federal Reserve Board’s CCAR qualitative relief to all banking organizations; and (iv) codifying certain US Government Accountability Office’s recommendations for stress test improvements.  Additionally, CHOICE 2.0 would: (i) continue to require a leverage ratio of at least 10% Tier 1 capital to qualify as a qualifying banking organization (QBO), but drop the additional requirement of a CAMELS score of 1 or 2 at the time of opt-in; (ii) remove the FDIC from the Section 165 living will process to align with the elimination of the Orderly Liquidation Authority; (iii) restrict operational risk capital requirements to a bank’s current activities and businesses and permit adjustments for operational risk mitigants; and  (v) rename the CFPB the “Consumer Financial Opportunity Agency,” structured as an executive agency with a sole director removable at will by the President.

View text of the HFSC press release regarding the bill.

View the text of the bill.

View text of press release issued by Chairman Hensarling regarding a discussion draft of the bill.