In a recent Bloomberg interview, Senate Majority Leader Mitch McConnell expressed skepticism about the Senate’s ability to pass meaningful Dodd-Frank reform.  After months of inactivity, the House Financial CHOICE Act finally moved out of committee to the House floor where a vote by the full House is expected in June.

Several other bills aimed at reforming the CFPB have been introduced by various Republican lawmakers in the House and Senate.  This legislative action would seem to suggest that CFPB reform was a real possibility.  Senator McConnell, however, cast renewed doubt on the prospects of reform, to the disappointment of many in the banking and finance industry.

Many factors stand in the way of significant Dodd-Frank reform in the Senate.  As Senator McConnell acknowledged, Republicans would need the support of at least some Democrats on the Banking Committee and in the full Senate.  According to Bloomberg, Democrats and Republicans appear to agree on the need for community banking reform, but little else.  Of course, the two parties do not necessarily agree on what counts as a small, community bank, as both have pushed differing size thresholds in the past.

The slim Republican majority in the Senate is not the only thing standing in the way of meaningful reform.  Even if it passed the House, the revised CHOICE Act was likely to face stiff resistance in the Senate.  Unfortunately, the revised version dropped the proposal for a five-member commission in favor of a single director removable at will.  Industry has long viewed a commission as a more appropriate structure, to bring stability and predictability to the agency over the long run.

Although the more modest Senate proposals, such as reforming the CFPB’s funding mechanism, had a greater chance at passage, the recent turmoil in Washington, of course, will make passage of any legislation difficult, and make grand reforms much less likely.  At the end of the day, meaningful change to the CFPB is more likely to come from within the agency itself when a new director is appointed in July 2018.