Catching up on news from last week, the U.S. House voted 292 to 122 to undermine part of the Dodd-Frank financial reform law. Cheyenne Hopkins reported for Bloomberg that H.R. 922

would upend the 2010 law’s pushout provision by allowing trades of almost all types of derivatives by lenders with access to deposit insurance and discount borrowing. […]

Lawmakers included the original measure as a way to limit risk-taking by banks that got federal bailouts during the 2008 credit crisis. The pushout provision was faulted by banks and also by regulators including Federal Reserve Chairman Ben S. Bernanke, who expressed concern that it could drive swaps trading to less-regulated entities.

All but three Republicans present voted for this bill, joined by 70 Democrats. Iowa’s Tom Latham (IA-03) was a yes, while Steve King (IA-04) did not vote. Meanwhile, Bruce Braley (IA-01) and Dave Loebsack (IA-02) voted against the bill, as did most of the Democratic caucus. I did not see any public comment on this bill from any of Iowa’s four representatives. During the floor debate on October 30, Democrat Collin Peterson of Minnesota warned,

“This bill would effectively gut important financial reforms and put taxpayers potentially on the hook for big banks’ risky behavior,” Peterson said. “The provision is a modest measure designed to prevent the federal government for bailing out or subsidizing bank activity that is not related to the business of banking.”

Peterson also noted that under current law, banks can still perform about 90 percent of the swaps hedges they were able to perform before Dodd-Frank.

Sounds like Braley and Loebsack made the right call. A White House statement argued against the bill as “premature” and possibly “disruptive,” but did not threaten a presidential veto.

LATE UPDATE: Iowa’s representatives also split on party lines when the House approved the so-called Retail Investor Protection Act on October 29.

The bill prevents the Department of Labor from issuing rules under the Dodd-Frank financial reform act that describes when financial advisors are considered a fiduciary, which means they must must work in their clients’ best interest. Under the bill, Labor would have to wait until the Securities and Exchange Committee (SEC) acts first in this area.

Alicia Munnell explained here why that Republican-backed bill was “fundamentally misconceived.”