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More Calls for a Commission, Not a Director, at the CFPB

The Consumer Financial Protection Bureau would be strengthened – not weakened – if its leadership structure were changed to a bipartisan commission, argues Roland E. Brandel in the American Banker. Calling the vesting of the bureau’s enormous power in a single person a “serious flaw,” the highly acclaimed consumer financial services lawyer writes: “A single director, no matter how intelligent, how well educated, how experienced, how well-meaning, and how well supported by staff, research and studies, faces limitations every human faces with respect to each of such qualifications. If the ultima... Read More »

On The Record: Community Bankers Speak Out On the Impact of Dodd-Frank Regulations

Obama Administration officials are frantically trying to convince the public that the 400 new regulations tucked inside the 2,300-page Dodd-Frank Act are having absolutely no impact on small town and mid-sized banks. None. Whatsoever. So just move on, OK? Nothing to see here. But, what are community bankers saying? A much different story in congressional testimony and in statements to their local newspapers: One community banker from Illinois said, “The Dodd-Frank Act will add an additional, enormous burden, has stimulated an environment of uncertainty, and has added new risks that will inevit... Read More »

Secretary Geithner: Regulations Will ‘Raise Costs of Business’ but that is ‘the Necessary Outcome’

Treasury Secretary Timothy Geithner offered a revealing insight into the Obama Administration’s attitude about regulations on Thursday when he testified before the Financial Services Committee. After Oversight and Investigations Subcommittee Chairman Randy Neugebauer told the Secretary he is worried about the cumulative impact that the Dodd-Frank Act’s 400 regulations will have on the economy, Secretary Geithner responded: “I think you are too worried about the cumulative impact of these financial reforms on the basic business of finance in the United States.” As the exchange with Rep. Neugeba... Read More »

H.R. 2167, the Private Company Flexibility and Growth Act

H.R. 2167, introduced by Rep. David Schweikert, removes an impediment to capital formation for small companies by raising the shareholder threshold for mandatory registration with the SEC from 500 to 1,000 shareholders. The shareholder threshold was originally adopted in 1964 and has not been modernized since then. At a recent hearing, the Committee received testimony from witnesses regarding the impact the bill will have on the availability of credit for small companies, job creation, and economic growth. Upon approval by the Capital Markets and Government Sponsored Enterprises Subcommittee, ... Read More »

H.R. 2940, the Access to Capital for Job Creators Act

H.R. 2940, introduced by Rep. Kevin McCarthy, removes the regulatory ban that prevents small, privately held companies from using advertisements to solicit investors for private offerings. Securities laws not only prohibit general solicitation and advertising but require investors to have an existing relationship with the company in order to meet SEC exemption requirements. This ban has limited the ability of small businesses to raise capital. On October 5th, the Capital Markets and Government Sponsored Enterprises Subcommittee approved H.R. 2940 by a voice vote. After Subcommittee passage, Ma... Read More »

H.R. 2930, the Entrepreneur Access to Capital Act

H.R. 2930, introduced by Rep. Patrick McHenry, permits “crowdfunding” to finance new businesses by allowing companies to accept and pool donations up to $5 million without registering with the SEC. Crowdfunding is an innovative and lower-risk form of financing that enables several individuals to pool money to in a particular company. SEC regulations prohibiting general solicitation have acted as a barrier to crowdfunding developing and flourishing in the United States. The bill was approved by the Capital Markets and Government Sponsored Enterprises Subcommittee on a vote of 18 to 14. Rep. McH... Read More »

The Small Company Job Growth and Regulatory Relief Act

The legislation, introduced by Rep. Stephen Fincher, expands the exemptions available to small companies from certain costly reporting requirements of the Sarbanes-Oxley Act. Since 2007 the SEC has exempted small companies with a market capitalization of less than $75 million. Market participants have repeatedly said the current SEC exemption provides no benefit since the threshold is too low. The bill was approved by the Capital Markets and Government Sponsored Enterprises Subcommittee on October 5th. The vote on final passage was 18 to 14. Upon Subcommittee passage of the bill, Rep. Fincher ... Read More »

Local Newspaper Stories Underscore Growing Concerns About Impact Of Dodd-Frank Act On Jobs, Economy

Outside Washington, D.C., there is growing concern about the regulatory burden imposed by the Dodd-Frank Act and the harmful effect it will have on jobs. Cynthia Richards, New Mexico’s Financial Institutions Division director, tells the Albuquerque Journal that the Dodd-Frank Act is “onerous,” “costly,” “confusing,” and “difficult to implement.” “When we see this act fully implemented we’re going to see across the nation the effect on competitiveness and the profound effect on the economy, and not for the good.” Richards explains the Dodd-Frank Act “is largely to protect banks that are too big... Read More »

The Dodd-Frank Act: Ill Conceived, Destined to Fail

Today’s American Banker includes a dead-on piece about how the Dodd-Frank Act, with its 2,300 pages and more than 400 regulations, is “regulatory overkill” with unintended consequences that hurt consumers and the economy. “It's a fool's mission for our government to try to micro-manage our financial system — and for all the lip-service paid to balancing regulation and markets, that's precisely what Dodd-Frank purports to do.” The Banker article notes the Dodd-Frank Act will result in higher consumer costs, fewer and bigger banks, fewer mortgages, and tighter credit. Although promoted by its su... Read More »

Senate Should Follow House’s Lead on Terminating Failed Program

The Washington Post reports today on another failure of one of the Obama Administration’s foreclosure mitigation programs. In an article headlined “HUD program to help struggling homeowners falling short,” the Post notes this is “the latest in a series of efforts that has left funds allocated by Congress unspent and has failed to help as many” borrowers as promised. The Emergency Homeowners’ Loan Program, which the Post in an earlier article described as a $1 billion “give away” program, is estimated by the Obama Administration to lose 98 cents for every one dollar it spends because of the pro... Read More »

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