This week has pitted Democrats and Republicans in the U.S. House and Senate against each other over a Republican bill to dismantle the Dodd-Frank Act. The legislation is a major part of enacting Republicans’ plans to overhaul the financial rules put in place during the recent economic crisis.

Jeb Hensarling, the House Financial Services Committee Chairman, drafted the bill to lessen the regulations on banks and money lenders. These efforts include a decrease in the exams which decide whether or not a bank can pay a shareholder’s dividends as well as an elimination of the Volcker Rule. The latter would repeal the rule that lenders must only use client’s money to make speculative bets.

Democrats, on the other hand, are attempting to use discussion surrounding Hensarling’s bill to bring up controversial issues. They are hoping to work towards breaking up the megabanks of Wall Street, to GOP lawmakers’ dismay.

Glass-Steagall

Democrats’ efforts include an attempt to reinstitute the Glass-Steagall Act which was instituted during the Great Depression and repealed in 1999. The law separated consumer lending and investment banking and many partially blame the 2008 recession on the repeal of the law. Some Democrats including Massachusetts Representative Mike Capuano consider proposing a Glass-Steagall amendment to Hensarling’s bill.

A bill to implement dramatic change in the way that banks currently run their businesses is unlikely to pass in Congress’ extremely polarized state. However, the discussions raised hold risk for the legislatures who receive support from the finance industry. Any support for the legislature which could weaken large lenders could harshly affect certain politicians’ careers.

However, a Glass-Steagall reinstatement was approved for the Republican platform during their July national convention. The act was not a focus point until these recent discussions brought it to light.

Comments by members of the Trump administration have only fueled the push to bring back Glass-Steagall. Gary Cohn, the White House economic advisor, recently stated that he would be in favor of a renewal of the act in some way.

According to anonymous sources, Cohn stated his support in a private meeting made up of senators. Cohn said that his opinion that investment and commercial banking should be separated is not new. He explained that cultural differences between the two sections of the finance industry make separation logical.

Banks Raise Concerns

The spread of the comments led to a flood of calls to the White House and congressional offices. Bankers and their lobbyists were desperately trying to get more details on Cohn’s stance.

Financial firms including JP Morgan Chase & Co., Bank of America Corp., and Citigroup Inc. hope to avoid being drawn into the debate but are concerned by its possible effects. Their fear is partially an effect of the lack of clarity over what a separation between investment and commercial banking means.

The Trump administration’s mixed signals on economic matters are partially to blame for the current disagreement in Congress. Trump himself has stated that financial regulations are harming economic growth and should be cut back on. However, his anti-Wall Street Populist statements while running for office contributed to his election success.

Trump and his administration have adopted the term “21^st century Glass-Steagall” which was first coined by the liberal Senator Elizabeth Warren. Steven Mnuchin, Treasury Secretary, states that this term could apply to a policy less focused on breaking up banks and more focused on walling them off.

Keefe, Bruyette, and Woods financial policy analyst Brian Gardner say that the real trouble for banks is what Glass-Steagall may later lead to. An overhaul of financial rules by the Senate is what banks fear.

A hearing on Hensarling’s bill, now called the Financial Choice Act, was held Wednesday by the House Financial Services Committee. However, is time to propose amendments as the panel vote is planned for next week.