For the third time since October, Iowa’s representatives have split along party lines as the U.S. House approved a bill that would undermine the 2010 Dodd-Frank financial reform law. Pete Kasperowicz reported for The Hill that the “Small Business Capital Access and Job Preservation Act” would remove a requirement for private equity firms to register with the Securities and Exchange Commission. It passed the House yesterday by 254 votes to 159, as 36 Democrats joined almost the entire Republican caucus. Iowa Republicans Tom Latham (IA-03) and Steve King (IA-04) voted for the bill, while Bruce Braley (IA-01) and Dave Loebsack (IA-02) voted no, along with most of the House Democrats. Braley and Loebsack also opposed the two other recent Republican efforts to undermine Dodd-Frank.

I have not seen any public comment on this vote from the Iowans in Congress. The Obama administration opposes the bill.

The legislation effectively provides a blanket registration and reporting exemption for private equity funds, undermining advances in investor protection and regulatory oversight implemented by the Securities and Exchange Commission (SEC) under Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Wall Street Reform).

The Administration is committed to building a safer, more stable financial system. H.R. 1105 represents a step backwards from the progress made to date, given that private equity fund advisers have been filing reports with the SEC for over a year. The bill’s passage would deny investors access to important information intended to increase transparency and accountability and to minimize conflicts of interest. Moreover, H.R. 1105 would exempt private equity funds from the disclosure requirements that the Congress laid out in Wall Street Reform to allow regulators to assess potential systemic risks.

According to Kasperowicz, the Senate is unlikely to take up this bill because of the White House veto threat.