The Financial CHOICE Act, a bill proposed by Congressman Jeb Hensarling (R-Texas) that passed the House in 2017, sought to give banks the option to hold more capital in lieu of undergoing CAMELS evaluations and stress tests. This essentially means banks that can absorb their own financial risks through elevated capital cushions need not be heavily regulated. They can qualify for relief from virtually all other safety and soundness requirements. More skin in the game, less oversight.The idea may sound reasonable, but it is ‘not that intelligent’ to implement. Maybe that is why it could not secure the 60 votes required in the Senate to become a law.
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