Ferguson: Empowering Main Street with financial CHOICE
Published 8:59 pm Wednesday, June 7, 2017
By Congressman Drew Ferguson
The 2008 global financial crisis hit the people of the third district and Georgia particularly hard. In fact, our district experienced more bank failures than anywhere else in the nation, and Georgians suffered a prolonged unemployment rate of over 10 percent. Dodd-Frank, the overreaching regulatory legislation passed in response to the crisis, only continued to harm our banks and main street economy.
But the third district and Georgia are not alone. Since the passage of Dodd-Frank, the United States has experienced the slowest economic recovery in its history. Instead of strengthening our financial institutions to facilitate economic growth, Dodd-Frank’s 2,300 pages and resulting 400 rules, has stifled opportunity across the economic spectrum.
While my own community has worked hard to rebuild our local manufacturing industry, we have not seen equal growth for local small businesses. Because of the tangle of regulations Dodd-Frank imposed on local banks, bankers suddenly found themselves wading through massive new government regulations, limiting their ability to take a chance on enterprising members of their own community. We found ourselves without small business development to match our manufacturing growth.
It is high time for Congress to correct the mistakes of Dodd-Frank. We have that opportunity with the Financial CHOICE Act, which will be considered this week in the House of Representatives. The Financial CHOICE Act would remove Dodd-Frank’s one size fits all approach to financial regulation and provide relief for well-capitalized banks and credit unions. Lifting this burden on financial institutions would allow them to invest in their communities again, unleashing the potential of Main Street small businesses and innovators to play an active role in rebuilding our economy.
This legislation eliminates unnecessary regulations on lending that created excessive costs and compliance requirements for community banks and restricted their ability to make loans, disproportionately limiting access to capital for those in lower socioeconomic groups. For example, provisions in the bill modernize regulations for investment vehicles that facilitate capital for small and middle-market businesses. These provisions will, in turn, allow entrepreneurs more freedom to access capital, grow their businesses and generate jobs in our modern economy.
Importantly, the Financial CHOICE Act ensures accountability in the federal government. Dodd-Frank created the Consumer Financial Protection Bureau (CFPB). Unlike every other government agency, the CFPB is not subject to Congressional oversight, and, unlike other members of the executive branch, the director of the CFPB does not answer to the president and can request additional funds from the Federal Reserve each quarter without justification. The Financial CHOICE Act would finally create oversight for this rogue agency and ensure federal regulators vigorously enforce and follow the law to protect consumers, not bureaucrats.
Protecting consumers also means Wall Street must be held accountable for careless risk-taking. The Financial CHOICE Act ends taxpayer funded bailouts once and for all. Financial institutions that fail will go through bankruptcy just like every other business. This legislation goes even further to protect consumers and levies the steepest penalties in history for financial fraud. These provisions in the bill have made the Financial CHOICE Act unpopular with Wall Street, but these are necessary changes to protect taxpayers.
Dodd-Frank has stifled the economic growth while growing the size of government and making Wall Street less accountable. It is time for us to lift the burden from both small businesses and consumers. The Financial CHOICE Act will free community banks and credit unions to invest in their neighbors again and gives Main Streets across the Third District, Georgia and the United States the opportunity to grow and thrive in a 21st century economy.
Drew Ferguson is the U.S. Representative for Georgia’s 3rd congressional district. He formerly served as the mayor of West Point.