It was one year ago today that President Obama signed the so-called “Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.” Like other signature pieces of legislation of this administration, the name can be misleading. Like the so-called “stimulus” that stimulated nothing but more government debt, this bill fails to actually reform Wall Street or protect consumers, which is a remarkable accomplishment, considering it was more than 2,300 pages long and contained more than 400 regulations and mandates.
For small community banks and credit unions, like those in Central and Northern Wisconsin, the hundreds of new rules will require an estimated 2,260,631 labor hours just for compliance. Those are hours that your local bank or credit union will spend dealing with some Washington bureaucrat instead of focusing on the needs of customers like you.
Just because Wall Street is in New York and has a bad reputation doesn’t mean it’s right or fair to lump the “little guys” in Wausau, Hayward and Superior in with them. As one of the few members on the House Committee on Financial Services from the rural Midwest, I have made it a top priority to speak up for the community banks and credit unions that are on Main Street, not Wall Street.
That’s why I’ve tried to reform the centerpiece of the Dodd-Frank law, the Consumer Financial Protection Bureau (CFPB), a brand-new agency that will cost the American taxpayers more than $329 million for 2012 alone. I am all for protecting consumers but this agency actually could hurt consumers and slow economic recovery because of the additional regulatory burden it creates for small, local financial institutions. More troubling is the lack of accountability of the CFPB, which will be led by a single, unelected bureaucrat who can set his own budget with no congressional oversight.
Today, the House will vote on H.R. 1315, a common-sense bill I’ve introduced to increase consumer protection and government accountability. It would replace the director with a bipartisan commission and establish a meaningful review process of CFPB rulings that are inconsistent with the safety and soundness of the banking system. This bill doesn’t get rid of the CFPB, it simply recognizes the reality that we cannot separate consumer protection from the safety and soundness of the banking system. If our banking system fails, our economy fails and ultimately, consumers suffer. This measure reflects my commitment to a system of checks and balances, and a financial system that is safe, sound and accountable.
The financial crisis that dragged our nation into a recession warranted action. Dodd-Frank was rammed through Congress on claims that by increasing government mandates and control over the private economy, we would see “robust growth in our economy” and “greater economic security” for our working families and small businesses. One year later, with new business creation at a 17-year low and paralysis in the private sector, it’s clear that Dodd-Frank has woefully underdelivered. While the promises of Dodd-Frank remain unrealized, its costs on the economy are real. It will have cost more than $1.25 billion by this time next year, lead to the hiring of thousands of new bureaucrats and will continue to be a drag on the private sector for decades to come.
Job creation has been and will continue to be my top priority in Congress. Part of getting our economy growing again and getting our people back to work means unraveling the burdensome mandates and regulations that are not just causing uncertainty in the marketplace, but killing jobs in America. One year after Dodd-Frank, let’s recommit ourselves to smart regulation that will help establish a job-friendly environment, protect consumers and turn this economy around.
Rep. Sean Duffy, Wisconsin Republican, is a member of the House Committee on Financial Services.