The chairman of the House Financial Services Committee had harsh words today for Democrats defending the Dodd-Frank Act.
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On Friday, President Donald Trump announced several steps Friday to undo rules enacted under Dodd-Frank. After a meeting with business executives, he signed a directive calling for the rewriting of major provisions in the act, according to a New York Times report.
Democrats were quick to blast the action as a love letter to Wall Street. House Democratic Leader Nancy Pelosi called Trump’s plan to roll back the act a “massive con” at a press conference today, vowing to fight the administration to preserve the act.
“The president has moved to expose hardworking Americans to unfair, deceptive and predatory practices, perpetuating a massive con on those who thought he would stand up for them against the powerful interests,” Pelosi said.
And Pelosi and Rep. Maxine Waters (D-Calif.), the ranking Democrat on the House Financial Services Committee, said the move proved that Trump’s campaign promises to be tough on Wall Street were untrue.
“What a pack of lies he told,” Waters said.
But Financial Services Committee Chairman Jeb Hensarling (R-Texas) said it was Dodd-Frank itself that “played right into Wall Street’s hands.”
“When Dodd-Frank was passed, Americans were promised a healthier economy, an end to bailouts and better consumer protections,” Hensarling said. “Instead, we have the weakest recovery in history, a guarantee of more Wall Street bailouts, and consumer costs have gone up while their choices have gone down. The number of banks offering free checking has been cut in half, fees have risen dramatically, mortgages are more difficult to close, and many auto loans now cost $500 more. Today the big banks are bigger and the small banks are fewer as we lose one community financial institution every day.”
Thanks to the act’s “red tape,” Hensarling said, customers were paying more for mortgages, credit cards and car loans – if they were even able to obtain them.
“Democrats played right into Wall Street’s hands when they passed Dodd-Frank,” Hensarling said. “As one Wall Street CEO said, Dodd-Frank has created a ‘moat’ of protection around the big banks. Another Wall Street CEO points out that Dodd-Frank’s complex rules and regulations serve to protect Wall Street’s big banks from competition from smaller mid-sized and community banks and credit unions.”
Hensarling urged the replacement of Dodd-Frank with the Republican alternative, the Financial CHOICE Act.
“The Financial CHOICE Act holds Wall Street accountable with the toughest penalties in history for those who commit fraud,” he said. “It ends Wall Street bailouts and requires failed firms to get bankruptcy, not bailouts. Instead of Dodd-Frank’s top-down, political regulations that hurt Main Street, the Financial CHOICE Act offers working families more freedom and opportunity so they can achieve financial independence.”