House Passes Financial CHOICE Act

The federal House of Representatives voted Thursday, June 8, 2017, to pass the Financial CHOICE (“Creating Hope and Opportunity for Investors, Consumers, and Entrepreneurs”) Act, a bill that will repeal a number of financial regulations that were created by the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The bill passed the House 233-186.

One of the core principles of the CHOICE Act, proposed by Texas Congressman Jeb Hensarling, is eliminating bailouts for large financial firms. Small community banks and credit unions are also set to receive regulatory relief under the Act as long as they meet certain financial requirements. In addition, the Financial CHOICE Act reforms the existing Consumer Financial Protection Bureau to weaken its power and replaces the Federal Insurance Office with the Office of the Independent Insurance Advocate.

The Dodd-Frank Act includes the Non-Admitted and Reinsurance Reform Act (NRRA), which established a single-state compliance requirement in insurance transactions, but this provision will remain unchanged. The defined “home state of the insured” and other measures that impact the surplus lines industry will not be affected by the proposed legislation.