Regarding the May 5 business article “House panel votes to roll back banking rules”: When Democrats passed the Dodd-Frank Act in 2010, they promised it would lift the economy, make the financial system more secure and end bailouts. None of this has come to pass.
Americans have suffered through the weakest recovery since World War II. Big banks have gotten even bigger, small banks have become fewer and markets have become more fragile – all increasing risk to the financial system.
Many claim deregulation led to the financial crisis. Yet financial regulations increased by nearly 20 percent during the decade leading up to the financial crisis. Washington regulators had all the authority they needed to properly regulate the financial system; they simply failed to use that authority responsibly, effectively or wisely.
Instead of recognizing this, Democrats created new problems by passing Dodd-Frank.
Dodd-Frank’s regulatory complexity and its promise of future bailouts gave big banks a significant competitive advantage over community banks and credit unions. While the big banks have gotten bigger under Dodd-Frank, roughly 1,700 community banks have ceased to exist. No wonder Wall Street CEOs have said publicly they do not want Congress to repeal Dodd-Frank.
Dodd-Frank also has failed to protect consumers. Under Dodd-Frank, one unelected and unaccountable bureaucrat at the Consumer Financial Protection Bureau has the power to decide what kind of mortgages, credit cards and bank accounts Americans can have – or whether they can have them at all.
There is a better way. The Financial Choice Act – which stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs – puts an end to Dodd-Frank’s system of bailouts and bureaucrats who limit choices and close the economy to opportunity and innovation.
The Financial Choice Act holds Wall Street accountable by ending “too big to fail,” replacing taxpayer bailouts with bankruptcy for failing firms and imposing the toughest penalties in history for those who commit financial fraud and insider trading.
Instead of unaccountable bureaucrats and politically motivated regulations that limit choices and raise costs, this plan offers working families more freedom and opportunity to achieve financial independence. The plan re-establishes the Consumer Financial Protection Bureau as a true cop on the beat that is fully focused on enforcing consumer protection laws. The act also levels the playing field and offers desperately needed regulatory relief for community banks and credit unions. In a phrase, the Financial Choice Act offers opportunity for all and bank bailouts for none.
U.S. Rep. Jeb Hensarling, R-Texas
House Financial Services Committee chairman
U.S. Rep. Patrick McHenry, R-N.C.
U.S. Rep. Robert Pittenger, R-N.C.
The length limit was waived to permit a fuller response.