Press Releases

McHenry Urges Regulators to Implement Regulatory Right-Sizing, Consumer Protection Policies


Washington, May 16, 2019 -

WASHINGTON – Today, the House Financial Services Committee held a hearing to receive testimony from the Chair of the National Credit Union Administration, Rodney Hood; Chair of the Federal Deposit Insurance Corporation, Jelena McWilliams; Comptroller of the Currency, Joseph Otting; and Vice Chair of Supervision of the Board of Governors of the Federal Reserve System, Randal Quarles.

Watch Ranking Member Patrick McHenry’s (NC-10) opening remarks here or by clicking on the image below.

Read Ranking Member McHenry’s opening remarks as delivered:

“Thank you, Chairwoman Waters, for holding today’s hearing and I want to thank the regulators for being here.

“Almost a decade ago, Dodd-Frank resulted in more than 400 new regulations and nearly 28,000 new restrictions.

“That’s more than the cumulative number of restrictions resulting from all other laws passed during the Obama Administration.

“It was such a massive undertaking that the federal financial regulators have yet to promulgate some of these rules, 10 years post crisis.

“Dodd-Frank was sold as the answer to consumer protection and financial stability, but it’s resulted in increased costs for financial institutions, and more headaches and paperwork for Americans as they try to open a bank account, get a mortgage, or save for retirement.

“One year ago, we enacted a bipartisan bill to balance the need for financial stability with consumer protection and regulatory right-sizing.

“Passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act brought the proverbial pendulum back toward the center, offering targeted relief to put financial institutions back in the business of serving their customers and the American economy.

“Last week, I wrote three of you on the panel about the faithful and swift implementation of this change in public law, notably the Volcker Rule, community bank capital simplification, tailoring for banks with more than $50 billion in assets, and improvement to the Supplemental Leverage Ratio for custody banks, among others. These four alone have the potential to provide billions of dollars in banking services for institutions and retail customers.

“I urge you to swiftly implement and faithfully implement the contents of what we commonly call S. 2155.

“Chairwoman Waters and I both agree, consolidation is being driven by regulation and the failure to swiftly implement this new law will drive more consolidation and the closure of more community institutions if it’s not done. That’s why we’ve provided that right-sizing and relief, for community banks and credit unions as well.

“Comment periods have closed on these provisions and it’s critical that you work to implement this law without delay.

“Aside from new Congressional mandates, many of the rules in which you are currently supervising merit modernization.

“Take, for example, the Community Reinvestment Act (CRA). CRA was enacted the same year Apple was incorporated to sell one of its first personal computers.

“Today, Americans conduct the overwhelming majority of financial transactions by smart phone. Yet, the CRA hasn’t seen even modest reform in more than a decade, that’s problematic, and it no longer reflects the realities of a revolutionized banking sector.

“This needs to be updated. Better regulation can fix that.

“Finally, it is vital for you to prioritize innovation and financial technology. Fintech holds considerable promise for institutions and consumers alike and will play a significant role in compliance and risk management.

“It’s important to ensure that banks can have the sound legal footing to partner with technology companies. The bank-fintech partnership holds considerable promise for institutions and consumers alike, but if bedrock legal principles such as “valid when made” and “true lender” are not resolved by the regulators, the next wave of digital banking will be for naught.

“I look forward to your testimony and the questions today.”

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