US House Financial Services Committee Chairman Jeb Hensarling provided remarks regarding proposed legislation to replace the Dodd-Frank Act. The Executive Summary and additional details were subsequently released, and the full bill is expected to be released later this month. Under the proposal, banks that maintain a leverage ratio of at least 10 percent and a composite CAMELS rating of 1 or 2 would be deemed well-capitalized and able to elect able to opt out of many regulatory requirements, including capital and liquidity requirements and limits on capital distributions and mergers or acquisitions.  The proposal would also repeal Title II of the Dodd-Frank Act (the orderly liquidation authority) and replace it with a new subchapter of the US Bankruptcy Code, remove the authority of the Financial Stability Oversight Council, to designate firms as systemically important and certain payments and clearing organizations as systemically important financial market utilities, and reform the Securities and Exchange Commission and Consumer Financial Protection Bureau. 

View the Executive Summary of the Financial Choice Act and Representative Hensarling’s speech.