Press Releases

Financial CHOICE Act Will Result in Economic Growth, End Bailouts


Washington, April 25, 2017 - Several witnesses scheduled to appear before the House Financial Services Committee on Wednesday to discuss the Financial CHOICE Act are praising the proposal’s focus on economic growth, accountability and ending bank bailouts.

CHOICE – which stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs – is the Republican alternative to the failed Dodd-Frank Act which has contributed to the slowest economic recovery since at least World War II and enshrines taxpayer-funded bailouts into law.

Excerpts from witnesses’ submitted testimony is below:

“By far the most important aspect of this proposed legislation is the provision which allows properly capitalized banks to opt out of the regulatory nightmare which is paralyzing the industry and slowing innovation, creativity and thereby economic growth. Lower income individuals are the most negatively damaged by this sad situation.

“For those primarily focused on safety and soundness, there can be a debate about which is the best capital standard. However, it is enlightening to note that after massive regulatory cost and intrusion over almost 9 years, a number of the largest financial institutions have leverage ratios of less than 8%. If I were CEO of one of these very complex institutions, I could not sleep at night with this low of leverage ratio. I will state with certainty after many years in the banking industry that raising these institutions leverage ratio to 10% would reduce the risk of the banks failing far more then hiring 5,000 or 10,000 more regulators to micromanage the companies.”
- John Allison, former Chief Executive Officer of BB&T, former President and CEO of Cato Institute

“Congress has to assert itself to carry out its own duty for governance of the many agencies it has created and for its obligation to ensure that checks and balances actually operate.

“The CHOICE Act is an excellent example of the Congress asserting itself at last to clarify that regulatory agencies are derivative bodies accountable to the Congress, that they cannot be sovereign fiefdoms—not even the Dictatorship of the CFPB”.

“The most classic and still most important power of the legislature is the power of the purse. The CHOICE Act accordingly puts all the regulatory agencies, including the regulatory part of the Federal Reserve, under the democratic discipline of Congressional appropriations. This notably would end the anti-constitutional direct grab from public funds which was originally granted to the CFPB—and which was designed precisely to evade the democratic power of the purse.”
- Alex Pollock, Distinguished Senior Fellow, R Street Institute

“The PHH incident is a clear-cut case of an unaccountable federal agency flouting the basic principles of the rule of law. Private firms—financial or otherwise—cannot safely operate in such an environment without the expectation of being wrongly persecuted by the government that is supposed to protect all of its citizens from such actions.

“The CFPB’s enforcement actions concerning Ally Financial provide another example of why federal agencies should not be given such independence. In this instance, the CFPB fined Ally for discriminating against minority borrowers even though Ally had no direct contact with the borrowers and despite the fact that the CFPB’s method for discovering such racial discrimination did not actually identify the race of the supposedly harmed individuals. No federal agency should be empowered to take these kinds of actions against American citizens, and allowing federal regulators such independence harms the very foundation of free enterprise.”
- Norbert J. Michel, PhD, Senior Research Fellow in Financial Regulations and Monetary Policy, The Heritage Foundation

“Smaller companies, which are an important part of our economy and of many Americans’ lives, have been forced to fight for the capital markets’ scraps through an awkward set of exemptions. And the SEC has viewed its capital formation and investor protection missions as adverse, rather than complementary…The CHOICE Act also allows more investors to qualify as accredited, a label that allows them access to a broader array of investments. Because many investors prefer to invest through pools, the relief afforded to pooled investment vehicles and their advisers by the CHOICE Act could also be instrumental in expanding small businesses’ access to capital. Many valuable ideas are provided to the SEC each year by the Government-Business Forum on Small Business Capital Formation. The CHOICE Act makes it more likely that the forum’s recommendations will result in reform by requiring that the SEC consider them.”
- Hester Pierce, Director of Financial Markets Working Group, Mercatus Center at George Mason University

“The Dodd-Frank Act has had a highly adverse effect on economic growth in the United States, primarily—although not entirely—through imposing substantial costs on small and community banks. The CHOICE Act attacks this problem in a comprehensive way—providing these banks, and potentially others, with an “off-ramp” that would allow them to avoid many of the most costly regulations if they adopt a capital position based on a 10% leverage ratio instead of the Basel risk-based capital standards. Larger banks could also take advantage of this exemption. This is an imaginative way comprehensively to address the problem of excessively costly regulations for small and community banks and restore the growth in the small bank sector that has been missing since the enactment of Dodd-Frank. A return of small and community banks, over time, will restore the growth among small business and startups that will get our economy moving where it needs the most help—at the local level.”
- Peter J. Wallison, Senior Fellow and Arthur F. Burns Fellow in Financial Policy Studies, American Enterprise Institute

To learn more about the Financial CHOICE Act, visit

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