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Hensarling: Financial CHOICE Act Ends Bailouts
Wednesday, May 3, 2017 6:45 AM

In his Tuesday newsletter, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) wrote, "The Financial CHOICE Act ends taxpayer-funded bailouts for banks, holds Washington and Wall Street accountable with the toughest penalties in history for fraud, and promotes economic growth."

In his opening statement at Tuesday’s markup of HR 10, the Financial CHOICE Act of 2017, which is the Republican alternative to the Dodd-Frank Act, Hensarling noted that when Dodd-Frank was passed nearly seven years ago, Americans were promised it would lift the economy and end bailouts.

"Instead, Dodd-Frank promises more taxpayer-funded bailouts for the Wall Street banks that unelected bureaucrats decree are too big to fail," he said. "We were promised that by turning more control over our economy to Washington, Dodd-Frank would make our financial system more secure." 

With Dodd-Frank, the big banks got even bigger, he said, and the country has lost more than 1,700 community banks.

"Instead of helping working families recover and achieve financial independence, university researchers concluded Dodd-Frank 'triggered a substantial redistribution of credit from middle class households to wealthy households,'" he said. "Indeed, the Federal Reserve tells us that when Dodd-Frank is fully phased in, one-third of black and Hispanic borrowers who were able to buy a home before the crisis will no longer be able to do so. Consumers who could depend on free checking at their banks no longer can because of Dodd-Frank." 

Consumers have found that their average monthly fees have tripled, Hensarling noted, and that for all the rhetoric we hear from the other side about how Dodd-Frank was supposed to be a “consumer protection law,” the reality is that with Dodd-Frank consumers are paying more and getting less.

Wall Street CEOs themselves have openly stated that their big banks are among the biggest beneficiaries of Dodd-Frank, Hensarling said. 

In addressing community banks and credit unions, he said, "This committee has heard from dozens of community bankers and credit union leaders about the very real harm Dodd-Frank is causing on Main Street. We see this especially when it comes to small businesses, America’s job creating engine. Just listen to the former director of President Obama’s Small Business Administration, who lamented the fact that Dodd-Frank’s heavy-handed regulations on community banks 'are getting in the way of their ability to make small business loans.'” 

The Financial CHOICE Act ends bailouts so Washington can never again pick taxpayers’ pockets and hand the money over to big banks, he said. "It ends too big to fail. It makes our financial system safer and helps avoid another crisis by replacing taxpayer funds with loss-absorbing private capital—far more capital than either Dodd-Frank or the Basel Accords requires." 

And he added that the Financial CHOICE Act will ensure that the shadow regulators come out from the shadows, will hold Wall Street accountable with the toughest penalties in history for fraud and insider trading, will unleash a wave of capital formation to grow America’s economy, and offers desperately needed regulatory relief for community banks and credit unions. 

"That’s why community banks and credit unions, who sometimes don’t always agree, have joined together in support of the Financial CHOICE Act," he said. 

For more information on the Financial CHOICE Act, visit FinancialCHOICE.gop.