Rep. Jeb Hensarling, Chairman of the House Financial Services Committee, delivered a public address on Tuesday on the committee’s plan to offer what he terms a “bold and better” alternative to the Dodd-Frank Act, according to an announcement from the committee.
In his address, Hensarling called Dodd-Frank the “Obama Financial Control Law” and asserted that it “stands as a monument to the arrogance and hubris of man in that its answer to incomprehensible complexity and government control is yet more incomprehensible complexity and more government control.”
Hensarling has been an outspoken opponent of the controversial consumer protection and Wall Street reform law, which was originally passed in 2010. Last year, the House Financial Services Committee held a series of three hearings on the effects of Dodd-Frank as the law celebrated its fifth birthday. The hearings were titled “The Dodd-Frank Act Five Years Later” and came with the subtitles “Are We More Free?”, “Are We More Prosperous?” and “Are We More Stable?”
Hensarling asserted in his speech on Tuesday that the Dodd-Frank Act equated to “regulatory waterboarding” due to the “sheer weight, cost, complexity, and uncertainty of federal regulation” that he said is killing small businesses and community financial institutions.
The alternative to Dodd-Frank proposed by the House committee is pro-growth and pro-consumer, according to Hensarling, and will hold Washington accountable by implementing rigorous cost-benefit tests for every financial institution.
“The Ranking Democrat (Rep. Maxine Waters) on my committee has called cost-benefit tests ‘dangerous,’” Hensarling said. “But shouldn’t we know the impact a proposed regulation will have on our economy before it gets implemented? Only in Washington is this called ‘dangerous.’ In my hometown and yours, it’s called common sense.”
Hensarling vowed that the committee’s alternative to Dodd-Frank will “toughen penalties” for those who defraud consumers and will “help build the healthy and secure financial system Americans deserve. One that protects consumers by letting you serve their needs in competitive, transparent, and innovative markets, vigorously policed for force and fraud. One that ends taxpayer-funded bailouts and instead unleashes America’s entrepreneurial potential.”
“(Dodd-Frank) stands as a monument to the arrogance and hubris of man in that its answer to incomprehensible complexity and government control is yet more incomprehensible complexity and more government control.”
Rep. Jeb Hensarling
He continued, “The bold and better alternative you will see from committee Republicans will provide vast regulatory relief for financial institutions in exchange for meeting high, but simple, capital requirements. If financial institutions elect to hold strong Tier 1 capital, then they should gain relief from both Dodd-Frank and Basel’s burdensome regulations, neither of which were meant for community banks and shouldn’t apply to them to begin with.”
Moving forward, Hensarling noted, this will not be a debate over regulation versus de-regulation, but instead will be a debate over “the future of our economy and the hopes and dreams of millions” and that the source of prosperity in America “has and will always be freedom, free markets, and free enterprise.”