Hensarling reveals details of plan to replace Dodd-Frank

by Ryan Smith08 Jun 2016
The chairman of the House Financial Services Committee on Tuesday revealed details of the Republican plan to replace the Dodd-Frank Act.

The Republican alternative is called the Financial CHOICE Act – CHOICE standing for “Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs.”

“If we want strong economic growth and more freedom, we must empower Americans, not Washington bureaucrats,” said committee chairman Rep. Jeb Hensarling (R-Texas). “We must offer all Americans greater opportunities to raise their standard of living and achieve financial independence. In a phrase, we need economic growth for all and bank bailouts for none. This is the foundation of the Republican plan to reignite growth by replacing Dodd-Frank with real reforms that work.”
Hensarling said that the Financial CHOICE Act would be introduced as new legislation later this month. Among other things, the act would end taxpayer-funded bailouts of large financial institutions, relieve strongly capitalized banks from “growth-strangling regulation,” and impose stricter penalties on those who commit fraud and greater accountability on regulatory agencies.

“Accountability is at the heart of our Republican reform plan,” Hensarling said. “If we are to successfully protect consumers and grow our economy, we must demand greater accountability from both Washington and Wall Street. Our plan toughens penalties – not out of some ideological or poll-driven war against Wall Street – but simply to better protect consumers and strengthen their markets.  This is key to economic growth.”

The act would also create a new subchapter of the Bankruptcy Code to specifically address the failure of large, complex institutions. Hensarling said that the change would end “too big to fail.”

“Taxpayer bailouts of financial institutions must end, and no company can remain ‘too big to fail,” he said. Hensarling said that as a result of the Republican plan, “some large firms will likely become smaller, because the credit they now obtain will be priced according to their inherent risk of failure without implicit government guarantees backing firms that are ‘too big to fail.’ As a result, failure – when it does happen – will be more contained.” 

The act also includes more than two dozen measures to provide regulatory relief for community banks and credit unions, according to a finance committee release.

“Pro-growth reforms in our plan will provide much-needed relief to community financial institutions that are being crushed by Washington’s one-size-fits-all regulatory approach,” Hensarling said. “This allows America’s small hometown banks and credit unions to focus their time and resources on their customers rather than the dictates of Washington bureaucrats.”

For an executive summary of the Financial CHOICE Act, click here.


  • by Griff | 6/8/2016 12:05:41 PM

    Why not provide relief to all small entities? As a small mortgage broker the deck is constantly stacked against myself and consumers with the limits imposed on fees, fees which include title, lender, appraisal, etc. In ability to charge less or more. Not to mention the rigged appraisal system. Relief to credit unions and savings and mortgages is already in place. I've seen a credit union take funds from a borrower's account for an appraisal before any documents have been and without permission to do so. I've seen banks talk to the appraiser, the appraiser talking to the buyer and seller. I know of savings and mortgages who change mortgage amounts and close the next day. Yep, Hensarling, they sure need a break.

  • by GS | 6/8/2016 1:53:56 PM

    I don't think DC can even see little brokers like us. From what I just read this doesn't change my business life one bit.


Should CFPB have more supervision over credit agencies?