Patrick McHenryChairman

Washington, May 15, 2015 - False Narrative of Financial Crisis Led to Wrong Remedy: D0dd-Frank

The Oversight and Investigations Subcommittee, chaired by Rep. Sean Duffy (R-WI), heard from witnesses at a hearing on Wednesday that the 2008 financial crisis was caused by bad government policies and regulatory incompetence, not a “lack of regulations” or “market failure.” Washington’s inaccurate diagnosis of the causes led to the wrong response: the 2,300-page Dodd-Frank Act and its burdensome regulations.

As a consequence of hastily enacting Dodd-Frank, Washington has piled on more regulations that are smothering community financial institutions, other small businesses and consumers who are losing access to affordable credit and choice. Far from “lifting the economy,” as Dodd-Frank supporters claimed the Act would do, Americans remains stuck in the slowest and weakest recovery of their lifetimes.

"Those who supported Dodd-Frank have been more concerned with helping special interests in Washington than their constituents back home, and the proof is in the numbers. They don't lie," said Chairman Duffy in his opening statement.  “Fewer people have returned to the workforce than any other modern recovery. Banks are closing every week, and the number one cause that I hear from people back in Wisconsin is the excessive, crushing regulatory burden imposed by this administration and Dodd-Frank is a major cause of that burden. The crushing regulatory regime created by Dodd-Frank continues to keep people out of work, to keep businesses from hiring. It makes it harder for my constituents to get the loans they need to finance the expansion of their business, or to buy their first home."

Subcommittee Continues Review of Jobs Bills

The Capital Markets and Government Sponsored Enterprises Subcommittee, chaired by Rep. Scott Garrett (R-NJ), held a hearing on Wednesday to continue its review of legislative ideas to help small and emerging companies access capital so they can grow and create jobs. 

Small businesses are the primary source of job growth in America, yet the sheer weight, volume and complexity of Washington regulations hinders their ability to create jobs and spur economic growth.

“As multiple witnesses have testified to this Committee over the years, our current equity market structure in many ways disadvantages small issuers, who often times find their stocks trading in illiquid markets with little to no research coverage.  This has the ultimate effect of raising the cost of capital for these companies, impacting their ability to grow and hire new workers,” said Chairman Garrett. 

Chairman Jeb Hensarling (R-TX) said in his opening statement, " In the era of “big data,” large-scale security breaches are unfortunately all too common. Every breach leaves consumers exposed and vulnerable to identity theft, fraud and a host of other crimes.”

Chairman Hensarling said he viewed the hearing as a venue for a “thoughtful and constructive dialogue on a bipartisan basis,” about the issue, and he commended Reps. Randy Neugebauer (R-TX) and John Carney (D-DE) for introducing bipartisan data security legislation.