Hensarling: Dodd-Frank has created ‘too small to succeed’

by Ryan Smith25 Jul 2016
Instead of ending “too big to fail,” the Dodd-Frank Act has created a culture where businesses are “too small to succeed,” according to the chairman of the House Financial Services Committee.

Speaking Thursday – the sixth anniversary of the Dodd-Frank Act, Rep. Jeb Hensarling (R-Texas) called the act “one of the main reasons why we’re stuck in the worst economic recovery of our lifetimes.”

“Only Washington would claim Dodd-Frank is ‘Wall Street reform,’” Hensarling said. “Dodd-Frank includes a taxpayer-funded bailout scheme for banks designated ‘too big to fail.’ It gives big banks an advantage over small ones that can’t keep up with the size, cost and complexity of all its regulations. Instead of ending ‘too big to fail,’ Dodd-Frank has created ‘too small to succeed.’”

Hensarling said that the law is harming consumers as well as businesses. According to the lawmaker, the number of banks offering free checking has been cut in half since the law’s passage. He also said that Dodd-Frank regulations “have fueled a surge in customer fees and cost increases,” and that smaller banks are finding it harder to offer mortgages.

“We need to get government out of the bailout business and level the playing field so small banks and credit unions have a better chance to compete and help our economy grow stronger,” Hensarling said.

He said the Financial CHOICE Act, the Republican alternative to Dodd-Frank, would remedy many of the current law’s problems. The act would require failed businesses to file for bankruptcy rather than receiving a government bailout. It would also roll back many of the regulations put in place under Dodd-Frank.

“Instead of Dodd-Frank’s bailouts and lackluster economy, we can achieve economic growth for all and bank bailouts for none with the Financial CHOICE Act,” Hensarling said.


  • by | 7/25/2016 11:29:27 AM

    FInally someone in congress is starting to realize the ramifications. To small to succeed should be the Dodd Frank Slogan.

  • by Griff | 7/25/2016 11:52:34 AM

    2 small to succeed has a nice ring to it when contemplating reality. Unfortunately Congress trying to fix anything is not something we can anticipate actually improving a situation. Free market would be a great step in the right direction. Having a board vs one person running the cfpb would not be that helpful. Allowing small banks and credit unions a pass would not be helpful. If we go there then release small mortgage brokers also to order their own appraisals vs going thru the lousy AMC's. Small banks are doing it and small banks are breaking the rules already why give them a license to steal?

  • by LIONEL SMITH | 7/26/2016 12:37:59 PM

    Finally Congress is realizing that Dodd-Frank only help the big Banks to get away with their crimes after pushing subprime mortgages on small
    Brokers like myself, then Dodd-Frank blamed the Mortgage Brokers because of yield spread! Now we are almost extinct because to earn
    less than a 1000.00 per deal with appraisers appointed by the Government doesnt make sense, meanwhile Realtors still makes 6% pushing large home on anyone they can, leaving it up to the Lenders to secure the financing... Dodd-Frank killed the Mortgage Broker Business with over- disclosing and basis points....


Is TILA-RESPA a good or bad thing long term?