“For seven years now, the Dodd-Frank Act has stifled the American Dream—for half of the country,” said U.S. Representative David Kustoff (R-TN) in an opinion piece on CNBC. According to Kustoff, Dodd-Frank requires rolling back, and it has caused plenty of harm since then. Though it saved plenty of big banks during the recession, its regulation has stifled many smaller banks.
“Our smaller communities and hopeful entrepreneurs have been shut out, said Kustoff. “Those who are seeking to start or grow their small business are incapable of accessing the capital necessary to merely plant both feet on the ground.”
The long-term effect of Dodd-Frank has been the negative impact on community banks, regional banks, credit unions and other lenders. “These smaller financial institutions have their hands tied with onerous regulations and high compliance costs, and their ability to loan money is constrained,” said Kustoff.
Kustoff recommends rolling back some of the regulations in order to ease that strain on small banks. He is currently working with Financial Services Committee Chairman Jeb Hensarling to make that happen, and change the current system
“[Federal Reserve] Chair Yellen said that our nation is at full employment and that, while there is still room for improvement, wages are rising,” said Kustoff. “Chair Yellen should take a drive through West Tennessee. She would see how that may be true for the half of America that benefitted from Dodd-Frank. Unfortunately, Chair Yellen's evaluation was not considering a dynamic economy—an economy that encourages new businesses, new job creation and new salaries.”
Washington’s “one-size-fits-all” regulations have made lending difficult for small banks, and Dodd-Frank has cut off access to credit cards and home equity lines of credit, as credit-card issuance hit a record low of 50 million fewer accounts than before the recession.
Now, the opportunity is right to start rolling back that regulation.
“The Financial Services Committee has already hit the ground running on legislation that will dismantle Dodd-Frank and open the door for all Americans to achieve financial independence,” said Kustoff “I am encouraged by the ambitious and productive schedule Chairman Hensarling has mapped out.”
He continued, “Dodd-Frank created two Americas, but I see a unified U.S. economy that serves all Americans.”
Read Kustoff's full story here.