Patrick McHenryChairman

Washington, June 17, 2016 -

Nearly seven years after the Great Recession ended, the economy still isn’t working for millions of working Americans. Their paychecks remain stagnant; their savings have declined. They cannot get ahead and fear for the future of their families.

One of the principle reasons for this is the Dodd-Frank Act. Though many have not heard of it, Dodd-Frank is to household finances what Obamacare is to healthcare.

When they voted for it, supporters of Dodd-Frank said it would promote financial stability, end too-big-to-fail, and lift the economy. None of this has come to pass. Instead, since the law’s passage, the big banks have gotten bigger, the small banks have gotten fewer, and Washington bureaucrats have been empowered to officially designate some firms to-big-to-fail, setting them up for the next round of bailouts.

Instead of lifting our economy, small business lending from banks has declined and the rate of new business start-ups is near a 20-year low. Entrepreneurship has dropped to a generational low.

Consumers have been hurt as well, from the loss of free checking, to more expensive credit cards, to a surge in fees. All of this resulted from the sheer weight, volume, complexity, cost and uncertainty of Dodd-Frank’s regulatory overload.

But perhaps more ominously than making us less prosperous and less stable, Dodd-Frank has also made us less free. It represents a breathtaking and unconstitutional outsourcing of legislative powers to the executive branch. Our democratic rule of law has given way to the discretion of regulators.

For example, the Orwellian-named Consumer Financial Protection Bureau has been granted the unprecedented power to arbitrarily declare mortgages, credit cards, or bank accounts unfair or abusive, at which point, Americans can’t have them, even if they need them, want them and can afford them. Only in Washington is this called “consumer protection.” Frighteningly, Dodd-Frank’s Financial Stability Oversight Council has been granted vast, sweeping powers to essentially control any large financial firm, thus allowing Washington to allocate credit for political purposes.

In short, Dodd-Frank has failed our economy and threatens our freedoms.

It is time for a better way forward. In a phrase: we need opportunity for all and bank bailouts for none. That is the foundation of our plan, the Financial CHOICE Act.

We wrote the financial CHOICE Act, which stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs, because we believe that private bank capital is the most basic element in making a financial system healthy, resilient and reliable for economic growth.

The plan relieves financial institutions from burdensome regulations in exchange for meeting higher, yet simple, loss-absorbing capital requirements. Banks may opt-in to this alternative regime that replaces growth-strangling regulation with reliable accountability. It stops investors from betting with taxpayer money.

Another key part of our reform plan is ending too-big-to-fail once and for all. The answer is simple: bankruptcy, not bailouts. By creating a new subchapter of the bankruptcy code tailored to specifically address the failure of a large, complex financial institution, the Financial CHOICE Act stops Washington from taking your money for Wall Street bailouts.

If we are to successfully protect consumers and grow our economy, we must demand greater accountability from both Washington and Wall Street. That is why we end the practice of financial regulatory agencies writing their own budgets. We also hold Washington accountable by converting financial regulatory agencies presently headed by single partisan directors, like the CFPB, into bipartisan commissions, and force them to conduct rigorous cost-benefit analysis to thoroughly understand the economic impact of regulations on jobs and consumers.

But just as unaccountable bureaucrats in Washington can harm our economy and consumers, so can illegal activity by bad actors in financial institutions. Therefore, the Financial CHOICE Act will impose the toughest penalties in U.S. history for financial fraud, self-dealing, and deception.

After holding Washington and Wall Street accountable, our reform plan focuses on re-igniting America’s entrepreneurial spirit by increasing financing options and reducing regulatory barriers to small businesses so more Americans can create, build and innovate.

Seven years after the Great Recession ended, we find ourselves with so few meaningful jobs and so little growth. The American people deserve better. They deserve an economy that’s more prosperous, a future that’s more secure and a nation that’s more free. That is what we will gain with the Financial CHOICE Act.

Hensarling is a member of the U.S. Congress representing Dallas and the chairman of the House Financial Services Committee. Twitter: @RepHensarling