CHOICE Act: Reform or Recalibration?

Morrison & Foerster LLP

In the last session of the US Congress in mid-2016, representative Jeb Hensarling first introduced the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers, and Entrepreneurs) Act. This represented an amalgamation of new proposals as well as numerous individual measures that had been introduced in Congress, as a comprehensive deregulatory bill. The Financial CHOICE Act failed to advance much beyond the Financial Services Committee of the House of Representatives in 2016. Given the new presidential administration’s deregulatory agenda, it has been anticipated that new legislation would be introduced to carry forward campaign commitments to repeal the DoddFrank Act. However, thus far, from the administration itself there have been only various presidential orders, such as the executive order relating to the core principles for regulating the United States financial system (order 13772), which addresses the principles pursuant to which effective financial services regulation should be evaluated for potential amendment or repeal. To fill the breach, representative Hensarling introduced a new version of the Financial CHOICE Act, referred to as CHOICE 2.0, in the House of Representatives – this was recently adopted by the House Financial Services Committee. While it is unlikely, given the many disparate measures that comprise the draft of the proposed legislation, that CHOICE 2.0 will be enacted in its current form, it is worth reviewing the principal provisions and the measures that might find broad support.

Overview of the CHOICE Act -

Like the predecessor bill, CHOICE 2.0 covers a lot of ground by addressing elements of the Dodd-Frank Act, adopting amendments intended to promote capital formation, and limiting the independence of various government agencies, by, among other things, requiring significant changes to the cost-benefit assessments required prior to adoption of new regulations.

Originally published in International Financial Law Review on June 22, 2017.

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