Financial Services Committee
Chairman Hensarling Opening Statement at Today's Full Committee Markup
Washington, Jun 19 -
Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at today's full committee markup:
Today the Committee on Financial Services meets to consider four pieces of legislation to amend titles IV and IX of the Dodd-Frank Act by reducing the red tape burden on our job creators. As we know, both statistically and certainly the anecdotal evidence is overwhelming, that many of our job creators will cite the regulatory red tape burden as the number one impediment to the success of their firms and to the inability to hire more workers. In fact, we know that in the Obama Administration we have seen at least a 54 percent increase in the regulatory burden upon our businesses. So it is incumbent on our committee to analyze each and every one of these regulatory burdens that is within our jurisdiction to essentially make sure the reported benefits are worth the actual cost.
Three of the four bills the committee will consider today are bipartisan or have previously received significant bipartisan support. Two of them were approved by this committee during the 112th Congress with significant bipartisan support. Although the Dodd-Frank Act as enacted was originally promoted as “Wall Street reform” there is now no denying that a number of its provisions do have a costly impact on thousands of public companies that operate far from Wall Street and in no way caused or contributed to the financial crisis.
So we must examine each and every one of these provisions yet again, and we now have the benefit of almost three years of analysis of the law’s impact and often its unintended consequences. I would hope that Members, particularly on the other side of the aisle, would come to the conclusion that three years later these provisions are worth looking at; that Dodd-Frank is not necessarily infallible, it is not sacred text, and hopefully it is not seen as ideological foundation but instead a sweeping and dramatic law that, with the benefit of hindsight, may actually have some unintended consequences that our committee should address.
So this brings us to where we are today. This committee is continuing to consider targeted, pragmatic, and hopefully bipartisan fixes to some provisions that many committee Members may feel are unnecessary or unduly burdensome, again, upon our job creators -- when today, we literally still have millions of our fellow countrymen unemployed or underemployed. We have an economy that regrettably is growing at perhaps 1 ½ to 2 percent GDP growth when we know 3 ½ percent is the norm. That is not good enough for low and moderate income families who are still struggling to either secure the paychecks they have or seek the paychecks they do not yet have.
With respect to the four bills that we will be taking up today, it is the considered opinion of many on the committee that it is boards of directors, management, and shareholders who should ultimately make the decision about which accounting firms should audit a company’s financial statements -- not the PCAOB in Washington, DC. Nor should public companies have to necessarily compute, prepare, and release information that is immaterial to most investors and does not further the SEC’s mission, but, again, calculates data that imposes unnecessary and large costs upon public companies, ultimately hindering their ability to hire and return profits to shareholders.
Also, I don’t believe anybody can present objective evidence that private equity caused or contributed to the financial crisis, which obviously had its roots in lax mortgage underwriting promoted by many ill-advised government regulations and mandates. Yet the Dodd-Frank Act treats all private equity firms the same, and we believe that when we look at the number of private equity firms that have helped employ millions of Americans, this is a burden that we should pay very careful attention to.
Finally, we are all aware of the Department of Labor’s efforts to amend the definition of fiduciary under ERISA could conflict with the SEC’s permissive mandate under section XIX of Dodd-Frank. Ultimately, we believe this could hurt moderate-income Americans as they attempt to access financial advice, constrain their investment advices, and ultimately cost them money.
So in closing, I want to thank the sponsors and co-sponsors of these bills for their hard work. I encourage my colleagues to support the bills.