(Repeats with no changes to text)
WASHINGTON Dec 1 Community banks will face less
red tape and be able to lend to more small businesses once
Congress erases financial rules conceived after the economic
downturn of 2008, a leading Republican lawmaker said on
The plan from Jeb Hensarling, chairman of the House
Financial Services Committee, would roll back parts of the Dodd
Frank reform legislation, a law that was meant to prevent a
future financial meltdown by muzzling Wall Street.
Hensarling said Dodd Frank unduly crimps local lending and
that replacing Dodd Frank is his top priority.
"The most urgent need we have is to throw a life preserver
to community banks that capitalize our small businesses," he
told Reuters in an interview.
Hundreds of small banks failed in the wake of the 2008
financial crisis after they helped bundle risky mortgages for
Hensarling's plan would shield local lenders from some
liability if they hold home loans on the books. Other provisions
would eliminate paperwork for small business loans.
President-elect Donald Trump has said he intends to
"dismantle" Dodd Frank and replace the bill with legislation
that promotes economic growth.
The Trump administration and fellow Republicans who control
Congress will set the administration's legislative priorities,
But the Texan lawmaker said his alternative to Dodd Frank,
known as the Choice Act, would be the first legislation to move
through his committee.
"When we get the word from the Speaker (of the House) and
the administration that it's time to go, the House Financial
Services Committee will be ready."
Republicans control both houses of Congress but Senate rules
may give Democrats some say on the future of Dodd Frank. Party
leaders have promised to defend the legislation that protects
consumers from predatory lending and bans Wall Street from
While the Hensarling plan would roll back some Dodd Frank
provisions, it would also preserve checks on the largest banks.
Leading U.S. banks would either have to hold more capital to
brace for financial shocks or submit to tough scrutiny from
regulators under the Hensarling plan.
Individual banks may prefer to face tougher oversight rather
than put their wealth aside, Hensarling said, but the financial
system "would be better off with stronger balance sheets with
higher levels of capital."
(Reporting by Patrick Rucker; Editing by James Dalgleish)