Regulatory Overkill Cutting Off Access to Credit, Subcommittee Hears
Washington,
March 28, 2017 -
The Financial Institutions and Consumer Credit Subcommittee heard testimony from witnesses on Tuesday that Washington’s regulatory burden is restricting small business and consumer access to credit.
“Despite the rhetoric fed to us since its passage, consumers and small businesses haven't been protected by Dodd-Frank. Rather, the rules and regulations billed as the pathway to a stable economy have stifled small institutions and led to more restricted access to much more expensive credit. Even the Consumer Financial Protection Bureau, which purports to protect consumers, has smothered innovation and financial products that Americans want and need,” said Chairman Blaine Luetkemeyer (R-MO). “The result is that consumers and small businesses, the drivers of our economy, are left sitting on the sidelines and struggling to survive.”
Key Takeaways from the Hearing:
- Just like Obamacare, Dodd-Frank has left Americans with fewer choices, higher costs and less freedom.
- Financial institutions are exiting entire lines of business, limiting the availability of products and services for consumers.
- The Financial CHOICE Act will increase access to credit for consumers and capital for small businesses.
Topline Witness Quotes:
“Today, credit availability is substantially more constrained than it has been historically. Regulatory uncertainty combined with heightened enforcement risk have forced many responsible lenders to reconsider their ability to lend to the full extent of the credit box. These decisions ultimately impact the consumer, and often disproportionately impact low-to-moderate income borrowers, minorities, and first-time homebuyers.” - David Motley, President, Colonial Companies
“Simply put, regulatory overkill is cutting off access to credit for credit-worthy borrowers. The expense and distraction of regulatory compliance divert scarce funding and management resources from community lending – particularly for those marginal borrowers whose applications warrant closer review and a greater capacity for risk. These are the borrowers who get squeezed out by today’s regulatory burden.” - Scott Heitkamp, President and Chief Executive Officer, ValueBank Texas
“NFIB worries that over regulating these smaller, community banks will create more bank consolidation and deter new bank formations. Loans to these small businesses are critical to the health of local communities and, collectively, to the health of the small-business sector.” - Holly Wade, Director, Research and Policy Analysis, National Federation of Independent Businesses
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