The Dodd-Frank Act was intended to address the causes of the 2008 financial crisis. Although the legislation was well meaning, it resulted in many negative consequences for local economies.
The reforms created more government bureaucracy and regulatory red tape, which made it extremely difficult for community banks to operate, hindered access to capital for small businesses and limited consumer options.
The Financial CHOICE Act before Congress seeks to correct these unintended, negative consequences of Dodd-Frank. It is aimed at restoring a reasonable regulatory environment for the financial services sector that strengthens consumer protections and helps grow local economics — rather than stifling investment.
The Financial CHOICE Act provides more accountability from both Washington and Wall Street. It imposes the toughest penalties in history for financial fraud and requires regulatory rules pass a cost-benefit test. It ends taxpayer bailouts of financial institutions, simplifies regulations, reduces obstacles to credit and capital, gives consumers more credit and savings options, frees small business from unnecessary regulations, and demands greater oversight of the Federal Reserve and Consumer Financial Protection Bureau.
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It also creates a level playing field for banks of all sizes. It ensures that financial institutions are regulated based upon complexity of operations, and that smaller banks and credit unions aren’t subject to overly burdensome regulations that create a competitive disadvantage. Community financial institutions can focus more on customer relationships and using resources for lending, rather than lawyers and compliance officers.
Commerce Lexington Inc. supports the Financial CHOICE Act and applauds Congressman Andy Barr, as a member of the House Financial Services Committee, and House Financial Services Committee Chairman Jeb Hensarling, for their tireless work on these reforms.
The Financial CHOICE Act will help foster a more sensible, reliable and proportionate regulatory system that facilitates economic growth and job creation in Central Kentucky. This is a forward-thinking legislative proposal that corrects unintended consequences and results in a real win for community banks, businesses and consumers.
Robert L. Quick is president and CEO of Commerce Lexington Inc., the Greater Lexington Area Chamber of Commerce.