Following Wednesday’s Financial Services Committee hearing on the Financial CHOICE Act, Secretary of the Treasury Steven Mnuchin released a statement on Thursday supporting the act.
“As Secretary, I am committed to policies that will ensure sustained economic growth that is driven by Main Street and not held back by Washington,” said Mnuchin. “The existing regulatory system is limiting, not stimulating our economy. At the Treasury, we are focused on delivering regulatory relief that encourages banks to provide the capital and liquidity needed to create jobs and opportunities for growth, and that provides protection against taxpayer-funded bailouts.”
Financial Services Committee Chairman Jeb Hensarling (R-Texas) had introduced the Financial CHOICE Act on Wednesday as an alternative to the Dodd-Frank act. Financial CHOICE aims to end taxpayer-funded bailouts of big banks, impose tougher penalties for financial fraud and insider trading, and demand greater accountability from regulators.
“The Financial CHOICE Act guarantees that the era of big bank bailouts and ‘too big to fail’ is over. For banks that fail, there will be bankruptcy, not bailouts,” said Chairman Hensarling. “In order to qualify for much-needed regulatory relief, financial institutions will have to be so well-capitalized that they pose no threat to hardworking taxpayers or to our economy.”
The CHOICE act announcement came alongside Wednesday’s tax reform plan announcement, which calls for a reduction of corporate taxes down to 15 percent, cutting the top tax bracket down to 35 percent, and doubling the standard deduction. Mnuchin called the reform the “The biggest tax cut and largest tax reform in history of this country.”
According to Mnuchin, the tax reform and Financial CHOICE Act are steps to strengthen the financial system.
“I applaud the steady commitment and leadership that Chairman Hensarling and his colleagues have provided on these issues, and welcome the reintroduction of the CHOICE Act,” said Mnuchin “While I continue my work to implement the President’s executive order setting the core principles for financial regulation, I look forward to working with Congress to both support and strengthen our financial system and safeguard taxpayers."
Not all memebrs of the Financial Services Committee agree with Hensarling and Mnuchin. During the hearing on Wednesday, Representative Maxine Waters (D-California) expressed her disapproval of the Financial CHOICE Act.
“Democrats are going to fight against it, and stand up for Main Street,” said Waters. “This bill must not become law. There is too much at stake for consumers and for our whole economy.”
Despite the support of Dodd-Frank regulation, Hensarling argues that Dodd-Frank has done more harm than good. Financial CHOICE aims to right those wrongs.
“Under Dodd-Frank, consumers are paying more and getting less. Their costs have gone up, and they have fewer choices, more hassles and less access to credit,” said Hensarling. “True consumer protection comes from competitive, transparent and innovative markets that are vigorously policed for fraud and deception. This is precisely what the Financial CHOICE Act will do.”
An executive summary of the Financial Choice ACT can be found here.