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"A U.S. House panel voted yesterday to revoke new powers granted to financial regulators to liquidate faltering financial firms, though the move has little chance of getting through Congress, according to a Dow Jones newswire report yesterday. The 2010 Dodd-Frank financial overhaul law gave regulators broad new powers to take control of faltering financial firms and wind them down in an orderly way so that their failure doesn't threaten the broader economy, as was the case in 2008. Republicans have long argued that this part of Dodd-Frank amounts to institutionalizing bailouts. The House Financial Services Committee approved a bill to repeal this provision in a 31-26 vote. The wind-down power granted under Dodd-Frank "is taxpayer-funded life support for their creditors and permits future AIG-style bailouts," said Rep. Spencer Bachus (R-Ala.), the financial services panel's chairman. Republicans have pushed numerous proposals to weaken or repeal key parts of the law, most of which stand little chance of passing the Democratic-controlled Senate. Democrats say it would be irresponsible to leave the financial system with no process in place to deal the potential collapse of a large financial firm. The bill could serve as a template for what the Republicans could do if they gain control of both houses of Congress and the presidency next year."
~~American Bankruptcy Institute
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