Member Corner

Financial Services Committee Chairman Jeb Hensarling just rolled out the Financial CHOICE Act, a plan to replace the failed Dodd-Frank Act and grow the economy for all Americans.

And, like clockwork, left wing Democrats found the nearest possible microphone to trot out stale talking points about “Wall Street” and criticize the plan before they even knew what was in it.

Just like President Obama, we’re in “myth-busting” mode.  Here are some of their fact-free whoppers – and reality.

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Claim: Senator Elizabeth Warren claimed the Financial CHOICE Act is nothing but a “wet kiss” for Wall Street full of “giveaways.”

Fact: The Big Banks on Wall Street oppose the Financial CHOICE Act (as the New York Times reported here).  And PoliticoPro reports that while big banks aren’t supporting the Financial CHOICE Act, “small banks, however, did not hesitate to get behind the plan.”

We remind Senator Warren that the CEO of Goldman Sachs said his big Wall Street firm would be “among the biggest beneficiaries” of Dodd-Frank and the CEO of JPMorgan Chase said Dodd-Frank benefits Big Banks by creating a “bigger moat” – “deterrents for small financial institutions to jump into new business lines and steal market share.”

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Claim: Rep. Maxine Waters purported that the Financial CHOICE Act “gives Wall Street a ‘get out of jail free’ card”

Fact: The Financial CHOICE Act imposes the toughest penalties in history for financial fraud, self-dealing, and deception to protect consumers and strengthen markets.  It demands real accountability from Wall Street. (Side note: It’s the Obama Justice Department – with its prosecutorial discretion and power – that has treated Wall Street as Too Big To Jail.)  

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Claim: Senator Sherrod Brown claimed that we are attempting to “make life easier for mega bankers and tougher for ordinary Americans.”

Fact: To use the Senator’s terminology, “mega bankers” are opposed to our plan. Why? Because Democrats gave them a competitive advantage with Dodd-Frank.  Today, Big Banks are the only ones with the manpower and resources to navigate Dodd-Frank’s regulatory maze. Community financial institutions don’t have the same luxury, which is why we’re losing an average of 1 per day.

And Senator Brown’s attack seems hypocritical since the Financial CHOICE Act takes a similar approach to one he proposed regarding capital standards.   

By the way, Senator:  It’s Dodd-Frank that has made life “tougher for ordinary Americans.” 

Before Dodd-Frank became law, 75 percent of banks offered free checking.  By 2015, just 37 percent of banks offered free checking.  “Not in the 12 years Bankrate has been studying it have so few banks offered real free checking -- a checking account with no monthly fee, regardless of your balance or whether you do direct deposit.” Dodd-Frank regulations fueled a 21 percent surge in checking fees and the mandatory minimum account balance needed to qualify for free checking has also increased. There are 15 percent fewer credit card accounts since 2008 and, on average, they cost 200 basis points more. Median household income has fallen by 3 percent and the personal saving rate has decline from 6.1 percent to 5.2 percent. According to the Federal Reserve, when fully phased in, one-third of black and Hispanic mortgage borrowers will be hurt by Dodd-Frank’s Qualified Mortgage rule based solely on its rigid debt-to-income ratio; and one out of every five borrowers who borrowed to buy a home in 2010 will not meet the rule’s underwriting requirements.

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Claim: White House Press Secretary Josh Earnest claimed the Dodd-Frank Act ensures “taxpayers will not be on the hook for bailing out the big banks.”

Fact:  The Orderly Liquidation Fund was created by Dodd-Frank and its sole purpose is to bail out Too Big To Fail banks. Here’s a pro-tip Josh, if it looks like a bailout and acts like a bailout, it’s a bailout. 

BONUS

Claim:  “[T]here should be no more confusion about which party is on the side of big banks and large financial interests on Wall Street.” – White House Press Secretary Josh Earnest

Fact:  You got that right.  Unlike the failed Dodd-Frank Act, the Financial CHOICE Act will provide economic growth for all and bank bailouts for none.