Washington, D.C. — House Financial Services Committee Chairman Jeb Hensarling’s (R-TX) Financial Choice Act would undermine the hard work done to repair the United States’ financial infrastructure, said the Center for American Progress’ Carmel Martin and Andy Green. The legislation, introduced today by Rep. Hensarling, would undo major components of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Carmel Martin, Executive Vice President for Policy at CAP, said:
Once again, House Republican leaders have failed to learn the lessons of the 2008 financial crisis and ensuing Great Recession. They’d rather turn back the clock than accept reasonable rules of the road designed to ensure a safe and accountable financial system that works for the real economy, families, and small businesses.
The so-called Financial Choice Act would eliminate independent funding for financial regulators, such as the Consumer Financial Protection Bureau, despite the long-standing precedent of shielding the stability of our financial system from the whims of the political process. The proposal would repeal or exempt financial institutions from critical postcrisis safeguards, such as the Volcker Rule’s ban on big bets, responsible mortgage standards, and healthy securitization rules. It would hamstring regulators’ ability to prevent the rise of the next “too big to fail” financial institutions by removing the ability to designate and regulate financial institutions as systemically important. These are just a few of its fatal flaws.
Andy Green, Managing Director of Economic Policy at CAP, added:
These proposed reforms would undermine the hard work of repairing our nation’s financial infrastructure in the years since the crisis. It would reopen the doors to risky financial activities on Wall Street that have ripple effects on Main Street and on our entire economy.
Instead of grandstanding in favor of powerful financial institutions, the House should get back to work addressing the actual challenges facing American families and the important work that remains to be done to prevent future, economically devastating financial crises.
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