Dow Jones: Republicans Decry Cost Of Dodd-Frank Overhaul
Washington,
March 31, 2011 -
Republicans Decry Cost Of Dodd-Frank Overhaul
By Alan Zibel
DOW JONES NEWSWIRES
30 March 2011
WASHINGTON -(Dow Jones)- U.S. House Republicans decried the costs of the Dodd-Frank financial overhaul Wednesday, arguing that it will impede U.S. economic growth by requiring companies to spend billions complying with new regulations.
The financial overhaul bill, passed last summer, is likely to result in nearly $27 billion in new private sector fees, assessments and premiums, according to a summary of testimony by the Congressional Budget Office. That includes $14.6 billion in new bank fees and $6 billion in assessments paid by large financial institutions deemed critical to the health of the financial system.
"That represents a deadweight loss to the economy, in the form of foregone income that could have been used by the private sector to fund investment in capital equipment, research and development, job creation or start-up funds for the next great American company," Randy Neugebauer (R., Texas), said in remarks prepared for a House Financial Services subcommittee hearing. "Instead, the funds will be used to significantly expand the federal government's footprint."
House Republicans have launched an attack on the landmark financial overhaul legislation, arguing that too many new regulations are cooling the U.S. economic recovery. "If there is a tremendous government overreach it could chill the recovery. I think it already is," Rep. Spencer Bachus (R., Ala.) told reporters on the sidelines of a U.S. Chamber of Commerce conference Wednesday.
Bachus, chairman of the House Financial Services Committee, said regulators are trying to move too fast on implementing rules mandated by Dodd-Frank. While most Republicans opposed the law's passage, they aren't trying to reverse it outright. Instead, they are targeting specific provisions of the bill.
Democrats, meanwhile, say that Republicans would dismantle important protections for the financial system and leave it vulnerable to a future crisis.
Meanwhile, Federal Reserve Bank of Richmond President Jeffrey Lacker said in testimony prepared for the hearing that the financial overhaul allows continued uncertainty on when the government might step in to rescue a failed financial firm. "Continued ambiguity thus would pose risks to financial stability and the economy, including the risk of new costs to taxpayers," Lacker said.
The Fed, the Treasury Department, and the Federal Deposit Insurance Corp. are working to write and implement new rules mandated by Dodd-Frank, which was approved by Congress last year. The law, which aims to prevent another financial crisis, left many details to regulators.
