Press Releases

WEEK IN REVIEW


 

Washington, March 24, 2017 -

Unconstitutional CFPB Focus of Hearing

The Oversight and Investigations Subcommittee held a hearing on Tuesday to examine how the structure of the Consumer Financial Protection Bureau (CFPB) violates the Constitution.

“It is time we hold Director Cordray responsible and restructure the CFPB within the framework of our Constitution,” said Chairman Ann Wagner (R-MO).

The hearing occurred just days after the U.S. Department of Justice filed papers in court arguing that the Bureau’s structure is unconstitutional.  “There is a greater risk that an independent agency headed by a single person will engage in extreme departures from the president’s executive policy,” the department said in the brief, filed with the U.S. Court of Appeals for the District of Columbia Circuit.

Witnesses at the subcommittee’s hearing agreed the Bureau is unaccountable.

“More than any other administrative agency ever created by Congress, the CFPB is far outside of our constitutional structure, holds the potential for tyrannical governance, and obscures the lines of governmental accountability,” said Theodore Olson, who served as United States Solicitor General from 2001-2004 and is currently a partner with Gibson, Dunn and Crutcher.

“No matter what the courts ultimately do on these issues, Congress itself ought to reform the CFPB in order to restore constitutional accountability to this unprecedented, unconstitutional agency,” testified Adam White of the Hoover Institution.

The JOBS Act at 5

The Capital Markets, Securities and Investment Subcommittee held a hearing on Wednesday to review the impact the bipartisan Jumpstart Our Business Startups (JOBS) Act has had during the five years since it became law.

While the JOBS Act is working, Congress and the Securities and Exchange Commission must do more to help small businesses and emerging growth companies access capital.  The Financial CHOICE Act, the Republican plan to replace the failed Dodd-Frank Act, includes numerous provisions to expand access to capital for small businesses and entrepreneurs.

“Let’s continue to build upon the success of the bipartisan JOBS Act by further modernizing our nation's securities regulatory structure to ensure a free-flow of capital, job creation, and economic growth,” said Chairman Bill Huizenga (R-MI).  “It's time to get the federal government working to support innovation and reward hardworking Americans.”

Dodd-Frank and the De Novo Drought

Members of the Financial Institutions and Consumer Credit Subcommittee met on Tuesday to examine the chill Dodd-Frank has had on the creation of new, or “de novo,” financial institutions.

“The historical data paints a very clear picture of what has happened since the passage of Dodd-Frank. From 2010 to 2016, there were only a handful of new bank and credit union charters granted. In comparison, more than 1,300 new banks and 75 credit unions were chartered between 2000 and 2008,” said Chairman Blaine Luetkemeyer (R-MO). “New financial institutions are a direct benefit to consumers and communities across the nation. The subcommittee will spend the next two years pursuing initiatives that promote financial choice and accessibility for all Americans.”

One community banker who testified at the hearing said the lack of new banks is one result of excessive regulation and Dodd-Frank is harming lending.  “Some have argued that bank lending continues and therefore, there has been no impact of Dodd-Frank.  Banks continue to lend even with the shackles that bind them.  However, in the five years since Dodd-Frank was enacted, the pace of lending was half of what it was several years before the financial crisis.  Some banks have stopped offering certain products altogether, such as mortgage and other consumer loans,” said Ken Burgess, Chairman of the First Capital Bank of Texas.

A credit union president and CEO representing the National Association of Federally-Insured Credit Unions said the compliance requirements in a post-Dodd-Frank environment “make it nearly impossible for many smaller institutions to survive, much less start from scratch.”

“Credit unions want to continue to aid in the economic recovery, but are being stymied by this overregulation, said Keith Stone of The Finest Federal Credit Union.

Subcommittee Examines the World Bank’s Development Results and Accountability

The Monetary Policy and Trade Subcommittee held a hearing to examine results and accountability at the World Bank.

“If the Bank is to be successful in its goal to eliminate poverty, then business as usual is not enough. The World Bank may have the best of intentions, but we must call on the Bank to deliver results, not simply look for new ways to push money out the door,” said Chairman Andy Barr (R-KY).

Hearing witness Sasha Chavkin with the International Consortium of Investigative Journalists said the World Bank has “serious problems with enforcing its safeguards and holding its borrowers accountable for following its rules.  The bank has repeatedly been unwilling to admit errors, responded to negative consequences of its projects with public relations and spin rather than taking responsibility for them, and failed to listen seriously to the voices of the poorest people in the world, whose wellbeing is at the heart of its mission. These shortcomings have real consequences, as large sums of aid flow to regimes and to projects that violate the bank’s rules and principles.” 

MEMBER SPOTLIGHTS

Rep. Robert Pittenger (R-NC) | Congressman Pittenger on banking regulation, recent town hall

Rep. Robert Pittenger believes Dodd-Frank should be modified and says the Consumer Financial Protection Bureau needs more accountability.

Rep. Ann Wagner (R-MO) | Rep. Ann Wagner takes aim at consumer protection chief

Rep. Ann Wagner is laying the groundwork for President Donald Trump to fire the Consumer Financial Protection Bureau’s director.

Weekend Must Reads

Chicago Business Journal | Small Illinois banks looking for relief from Dodd-Frank

The goal of the Financial CHOICE Act could be regulatory relief for smaller banks, as many blame the Dodd-Frank Act for a lack of small business and mortgage lending and for burdensome regulations.

The Hill |Give America's banks room to grow. They'll drive the economy forward.

Since the Dodd-Frank Act was enacted nearly seven years ago, more than 1,900 banks — or 24 percent of the industry — have disappeared. We now have fewer than 6,000 banks for the first time since the 1890s. Such rapid consolidation, combined with the lack of new entrants, is a troubling trend with negative consequences for customers and communities alike.

American Enterprise Institute | Evidence and the Trump budget

Unsurprisingly, advocates for the poor came out in strong opposition to the President’s budget. But missing from arguments against these cuts is evidence showing the effectiveness of eliminated programs.

American Action Forum | The Regulatory Freeze In Graphs

After five weeks of data, there is little doubt the Trump Administration’s regulatory freeze was effective.  It has eliminated potential regulatory burdens at a pace unseen with recent executive actions. 

On the Horizon 

Tuesday, March 28 at 10:00 a.m.
Oversight and Investigations Subcommittee
“The Arbitrary and Inconsistent Non-Bank SIFI Designation Process”

Tuesday, March 28 at 2:00 p.m.
Financial Institutions and Consumer Credit Subcommittee
“The State of Bank Lending in America”

Wednesday, March 29 at 10:00 a.m.
Capital Markets, Securities and Investment Subcommittee
“Examining the Impact of the Volcker Rule on the Markets, Businesses, Investors, and Job Creators”

 In the News

Washington Post | Embattled bankers embrace Trump’s call for deregulation: ‘Profit is not a four-letter word.’

Reuters | Key House lawmaker: Dodd-Frank overhaul remains a 2017 priority

ABA Banking Journal | Hensarling: Choice Act to ‘Remove Bureaucrats from the Boardroom’

Axios | The bank lending slowdown is bad news for U.S. economy

Politico Pro | Justice Department argues that Trump has power to oust CFPB director

Mortgages News Daily | Congress Holding Hearing on CFPB Constitutionality

Wall Street Journal | Banking Regulators Tell Congress They’re Trying to Ease Capital Rules for Small Banks

Credit Union Times | Regulatory Hurdles Too High for Potential New Credit Unions

Print version of this document