Instead of ending “too big to fail,” the Dodd-Frank Act has created a culture where businesses are “too small to succeed,” according to the chairman of the House Financial Services Committee.
Speaking Thursday – the sixth anniversary of the Dodd-Frank Act, Rep. Jeb Hensarling (R-Texas) called the act “one of the main reasons why we’re stuck in the worst economic recovery of our lifetimes.”
“Only Washington would claim Dodd-Frank is ‘Wall Street reform,’” Hensarling said. “Dodd-Frank includes a taxpayer-funded bailout scheme for banks designated ‘too big to fail.’ It gives big banks an advantage over small ones that can’t keep up with the size, cost and complexity of all its regulations. Instead of ending ‘too big to fail,’ Dodd-Frank has created ‘too small to succeed.’”
Hensarling said that the law is harming consumers as well as businesses. According to the lawmaker, the number of banks offering free checking has been cut in half since the law’s passage. He also said that Dodd-Frank regulations “have fueled a surge in customer fees and cost increases,” and that smaller banks are finding it harder to offer mortgages.
“We need to get government out of the bailout business and level the playing field so small banks and credit unions have a better chance to compete and help our economy grow stronger,” Hensarling said.
He said the Financial CHOICE Act, the Republican alternative to Dodd-Frank, would remedy many of the current law’s problems. The act would require failed businesses to file for bankruptcy rather than receiving a government bailout. It would also roll back many of the regulations put in place under Dodd-Frank.
“Instead of Dodd-Frank’s bailouts and lackluster economy, we can achieve economic growth for all and bank bailouts for none with the Financial CHOICE Act,” Hensarling said.