House Approves Financial CHOICE Act In Major Step to Repealing Dodd-Frank

June 9,2017
the staff of the Ridgewood blog

Washington DC, The House on Thursday passed the Financial CHOICE Act, legislation to overhaul and replace the failed Dodd-Frank Act that has contributed to the worst economic recovery of the last 70 years.

“Every promise of Dodd-Frank has been broken,” said Financial Services Committee Chairman Jeb Hensarling (R-TX), as he read letters from Americans about how they were declined home, automobile and small business loans due to Dodd-Frank’s burdensome regulations. “Fortunately there is a better, smarter way. It’s called the Financial CHOICE Act. It stands for economic growth for all, but bank bailouts for none. We will end bank bailouts once and for all. We will replace bailouts with bankruptcy. We will replace economic stagnation with a growing, healthy economy,” he said.

“We will make sure there is needed regulatory relief for our small banks and credit unions, because it’s our small banks and credit unions that lend to our small businesses that are the jobs engine of our economy and make sure the American dream is not a pipe dream,” said Chairman Hensarling.

CHOICE, which stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs, has received strong support from community banks and credit unions. Large financial institutions did not offer their support for the Financial CHOICE Act. Instead, Wall Street CEOs have publicly said they do not support repealing Dodd-Frank.

The Congressional Budget Office reports the Financial CHOICE Act would reduce the deficit by $33.6 billion over 10 years and that the bill’s regulatory relief would benefit community banks and credit unions. The nation’s largest banks would be unlikely to raise enough capital to meet the bill’s requirement for substantial regulatory relief, the CBO reported.

FINANCIAL CHOICE ACT AT A GLANCE:

BANKRUPTCY, NOT BAILOUTS

No more bailouts: that’s at the core of the Financial CHOICE Act. With changes to the bankruptcy code, large financial firms can fail without disrupting the entire economy or forcing hardworking taxpayers to pay for more bailouts.

ACCOUNTABILITY FOR WALL STREET AND WASHINGTON

The Financial CHOICE Act includes the toughest penalties in history for those who commit financial fraud and insider trading. Holding Wall Street accountable with the toughest penalties in history will deter corporate wrongdoing and better protect consumers. At the same time the Financial CHOICE Act holds Wall Street accountable, it also holds Washington accountable. Tougher accountability for Wall Street and Washington will protect the integrity of our markets so they benefit ordinary Americans who are working, saving and investing.

STRONGLY CAPITALIZED BANKS

Dodd-Frank’s one-size-fits-all regulations treat all financial institutions the same, regardless of their size. That makes no sense and hurts smaller, hometown banks and credit unions that did nothing to cause the last financial crisis.

The Financial CHOICE Act is based on two important principles: First, all banks need to be well-capitalized and, second, community banks and credit unions deserve relief from the crushing burden of over-regulation. Under the Financial CHOICE Act, banks and credit unions will qualify for regulatory relief if they elect to maintain enough capital to ensure that if they get in trouble, taxpayers won’t be forced to bail them out. Ninety-eight percent of the financial institutions that met the Financial CHOICE Act’s requirements for being well-capitalized did not fail during the financial crisis. Of the miniscule percentage that did fail, none posed a systemic risk.

EMPOWER AMERICANS

The Financial CHOICE Act grows our economy from Main Street up. Dodd-Frank tries to control the economy from Washington down. The Financial CHOICE Act will help get credit and capital into the hands of working men and women to fuel their economic growth.

President Trumps Budget Proposal Ends Dodd-Frank Act’s taxpayer-funded bailout scheme

May 24,2017
the staff of the Ridgewood blog

Washington DC, House Financial Services Committee Chairman Jeb Hensarling (R-TX) issued the following statement on President Trump's Fiscal Year 2018 budget proposal:

“The higher taxes, spending and borrowing that were the pillars of Obamanomics brought us the weakest economic recovery in our lifetimes, stagnant paychecks and more new debt than nearly all other presidents combined. Left unchecked, our nation is driving at breakneck speed toward a spending-driven debt crisis that will leave us a nation of downsized dreams and fewer opportunities. We cannot continue to grow Washington’s budget at the expense of the family budget. For the first time in almost a decade, a President has proposed a budget that puts us on a path to fiscal sanity. This budget is a sober document, and I’m pleased President Trump’s proposal takes a long overdue look at redefining the proper role of the federal government while simultaneously investing in our military at a time of increasing threats to our safety domestically and abroad.

“I am also pleased his budget proposal seeks to repeal the Dodd-Frank Act’s taxpayer-funded bailout scheme and bring spending accountability to the unconstitutional CFPB. Ending Wall Street bailouts and making Washington regulators accountable are key parts of the Financial CHOICE Act. If we want strong economic growth and more freedom, we must empower Americans, not Washington bureaucrats. I wish the White House had gone further in reforms to our entitlement system which is going bankrupt and represents the true driver of our nation’s spending driven debt crisis. I look forward to working with the administration and my colleagues in Congress to end bank bailouts, grow our economy and restore fiscal accountability to Washington.”

The Financial CHOICE Act Ends Bank Bailouts

May 2,2017
the staff of the Ridgewood blog

WASHINGTON DC, House Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at today’s markup of H.R. 10, the Financial CHOICE Act of 2017. The Financial CHOICE Act is the Republican alternative to the failed Dodd-Frank Act. The Financial CHOICE Act ends taxpayer-funded bailouts for banks, holds Washington and Wall Street accountable with the toughest penalties in history for fraud, and promotes economic growth. For more information on the Financial CHOICE Act, visit www.FinancialCHOICE.gop:

When Dodd-Frank was passed nearly 7 years ago, Americans were promised it would lift the economy. Instead, we’ve had the slowest and weakest recovery of our lifetimes. We were promised Dodd-Frank would end bailouts. Instead, Dodd-Frank promises more taxpayer-funded bailouts for the Wall Street banks that unelected bureaucrats decree are too big to fail. We were promised that by turning more control over our economy to Washington, Dodd-Frank would make our financial system more secure.

Yet, with Dodd-Frank the big banks got even bigger; we’ve lost more than 1,700 community banks; and corporate bond markets are seeing historic levels of illiquidity and volatility. That’s not a more secure financial system. That’s increasing risk to our financial system and setting the stage for the next crisis. Even the former director of President Obama’s National Economic Council admitted Dodd-Frank has not made large banks any safer than they were before Dodd-Frank.

Instead of helping working families recover and achieve financial independence, university researchers concluded Dodd-Frank “triggered a substantial redistribution of credit from middle class households to wealthy households.” Indeed, the Federal Reserve tells us that when Dodd-Frank is fully phased in, one-third of black and Hispanic borrowers who were able to buy a home before the crisis will no longer be able to do so. Consumers who could depend on free checking at their banks no longer can because of Dodd-Frank.

Instead, consumers find their average monthly fees have tripled. For all the rhetoric we hear from the other side about how Dodd-Frank was supposed to be a “consumer protection law,” the reality is that with Dodd-Frank consumers are paying more and getting less.

And for all the rhetoric we hear from the other side about how Dodd-Frank is a “Wall Street reform” law, the reality is Wall Street is doing just fine under Dodd-Frank.

Wall Street CEOs themselves have openly stated their big banks are among the biggest beneficiaries of Dodd-Frank. They’ve said Dodd-Frank’s complexity and regulations help them maintain a competitive advantage over their competitors. No doubt this is one reason why so many Wall Street CEOs are joining with Democrats to publicly say they don’t want Congress to repeal Dodd-Frank.

Community banks and credit unions – well, that’s a different thing. In hearing after hearing, this committee has heard from dozens of community bankers and credit union leaders about the very real harm Dodd-Frank is causing on Main Street. We see this especially when it comes to small businesses, America’s job creating engine. Just listen to the former director of President Obama’s Small Business Administration, who lamented the fact that Dodd-Frank’s heavy-handed regulations on community banks “are getting in the way of their ability to make small business loans.”

No wonder entrepreneurship is at a generational low in America. Regrettably, thanks to Dodd-Frank, too many garages are full of old cars instead of new startup small businesses.

It’s time for the bailouts to end. It’s time to help small businesses on Main Street. It’s time to make Washington and Wall Street both accountable. It’s time for the Financial CHOICE Act.

The Financial CHOICE Act ends bailouts so Washington can never again pick taxpayers’ pockets and hand the money over to big banks. It ends too big to fail. It makes our financial system safer and helps avoid another crisis by replacing taxpayer funds with loss-absorbing private capital – far more capital than either Dodd-Frank or the Basel Accords requires.

It creates a true cop on the beat to protect consumers. We will have a consumer agency fully focused on enforcing consumer protection laws instead of losing valuable time and resources making up their own laws with no accountability, checks and balances or due process. The Financial CHOICE Act will ensure that the shadow regulators come out from the shadows and that government will be accountable to We, the People.

The Financial CHOICE Act holds Wall Street accountable with the toughest penalties in history for fraud and insider trading.

Instead of trying to grow our economy the old way, with top-down Washington regulations, the Financial CHOICE Act will unleash a wave of capital formation to grow America’s economy – not Washington’s government economy.

And the Financial CHOICE Act offers desperately-needed regulatory relief for our community banks and credit unions.

That’s why community banks and credit unions, who sometimes don’t always agree, have joined together in support of the Financial CHOICE Act.

Americans are tired of waiting. They have struggled for far too long. It is time to end bailouts. It is time to hold Washington and Wall Street accountable. It is time to make our financial system safer, stronger and more secure. And it is time for a healthier economy, with equal opportunity for all. It is time for the Financial CHOICE Act.

I Host the Financial Crisis Tour and the Wall Street Insider Tour on Monday's in NYC

book it now https://www.thewallstreetexperience.com/

Financial Crisis Tour : Learn the Secrets at the Heart of the Collapse

The economic collapse of 2008 was the most devastating shock suffered by the financial sector since the Great Depression. The effects of the recession were felt world-wide, yet the reasons behind it are still shaded in mystery. What mistakes lead to the collapse of some of the longest and most enduring financial institutions in America? And how can we avoid the same missteps in the future?

https://www.thewallstreetexperience.com/financial-crisis-tour

Wall Street Insider Tour: Explore the History of the American Economy

The streets surrounding Wall Street are some of the oldest in the city. They occupy a special significance in American history, as so much happened in just a few city blocks. From the first Dutch settlers to the high stakes action of the Stock Market, New York is a city built on commerce, and Wall Street is its heart.

https://www.thewallstreetexperience.com/wall-street-insider-tour

House GOP Moves to End "Bailout Nation" with the Financial CHOICE Act

No More Bank Bailouts, Accountability for Wall Street and Washington, Economic Growth at the Core of Republican Plan

April 20,2017
the staff of the Ridgewood blog

WASHINGTON – Financial Services Committee Chairman Jeb Hensarling (R-TX) today announced that the Committee will hold a hearing to discuss the Financial CHOICE Act on Wednesday, April 26 at 10:00 a.m.

“Republicans are eager to work with the President to end and replace the Dodd-Frank mistake with the Financial CHOICE Act because it holds Wall Street and Washington accountable, ends taxpayer-funded bank bailouts, and unleashes America’s economic potential,” said Chairman Hensarling. “We want economic opportunity for all, bailouts for none. We want real consumer protections that will give you more choices. Our solution grows the economy from Main Street up, creates more opportunities for working families to get ahead, and levels the playing field with no more Wall Street bailouts.”

CHOICE stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs.

The ideas and principles behind the Financial CHOICE Act were first unveiled last June by Chairman Hensarling in a speech to the Economic Club of New York. The Financial Services Committee approved the Financial CHOICE Act in September. The Committee will discuss an updated version of the bill at Wednesday’s hearing.

“Supporters of Dodd-Frank promised it would lift the economy, end bailouts and protect consumers. Yet Americans have suffered through the worst recovery in 70 years, Dodd-Frank guarantees future bailouts for Wall Street, and consumers are paying more and have fewer choices. Dodd-Frank failed to keep its promises to the American people, but we will work with President Trump to follow through on his promise to dismantle Dodd-Frank. That’s not what Wall Street wants, but it is what hardworking Americans need to have a healthier economy with more opportunities so they can achieve financial independence.”

FINANCIAL CHOICE ACT AT A GLANCE:

BANKRUPTCY, NOT BAILOUTS

No more bailouts: that’s at the core of our plan and our commitment to hardworking taxpayers. With bipartisan changes to our bankruptcy code, large financial firms can fail without disrupting the entire economy or forcing hardworking taxpayers to pay for more bailouts.

ACCOUNTABILITY FOR WALL STREET AND WASHINGTON

The Financial CHOICE Act includes the toughest penalties in history for those who commit financial fraud and insider trading. Holding Wall Street accountable with the toughest penalties in history will deter corporate wrongdoing and better protect consumers. At the same time we hold Wall Street accountable, the Financial CHOICE Act also holds Washington accountable. Tougher accountability for Wall Street and Washington will protect the integrity of our markets so they benefit ordinary Americans who are working, saving and investing.

STRONGLY CAPITALIZED BANKS

Dodd-Frank’s one-size-fits-all regulations treat all financial institutions the same, regardless of their size. That makes no sense and hurts smaller, hometown banks and credit unions that did nothing to cause the last financial crisis.

The Financial CHOICE Act is based on two important principles: First, all banks need to be well-capitalized and, second, community banks and credit unions deserve relief from the crushing burden of over-regulation. Under the Financial CHOICE Act, banks and credit unions will qualify for regulatory relief if they elect to maintain enough capital to ensure that if they get in trouble, taxpayers won’t be forced to bail them out. Ninety-eight percent of the financial institutions that met the Financial CHOICE Act’s requirements for being well-capitalized did not fail during the financial crisis. Of the miniscule percentage that did fail, none posed a systemic risk.

EMPOWER AMERICANS

The Financial CHOICE Act grows our economy from Main Street up. Dodd-Frank tries to control the economy from Washington down. The Financial CHOICE Act will help get credit and capital into the hands of working men and women to fuel their economic growth.

Dodd-Frank Consolidates More Power in the Hands of Fewer Banks

Subcommittee Examines Chilling Impact of Dodd-Frank on New Financial Institutions March 21,2017
the staff of the Ridgewood blog


WASHINGTON DC, Members of the Financial Services Financial Institutions and Consumer Credit Subcommittee met on Tuesday to examine the chilling impact that the Dodd-Frank Act has had on the creation of new or “de novo” financial institutions.

“Today, we took the first step at looking into why there are so few new banks and the barriers to entry for would-be community financial institutions. The historical data paints a very clear picture of what has happened since the passage of Dodd-Frank. From 2010 to 2016, there were only a handful of new bank and credit union charters granted. In comparison, more than 1,300 new banks and 75 credit unions were chartered between 2000 and 2008.” said Subcommittee Chairman Blaine Luetkemeyer (R-MO). “New financial institutions are a direct benefit to consumers and communities across the nation. The subcommittee will spend the next two years pursuing initiatives that promote financial choice and accessibility for all Americans.”

Key Takeaways from the Hearing:

The number of new, or “de novo,” bank and credit union charters has declined to historic lows since the passage of the Dodd-Frank Act.

Since Dodd-Frank became law, the big banks have gotten bigger while the small banks and credit unions have become fewer.

From 2010 to 2016, there were only five new bank and 16 new credit union charters granted. In comparison, between 2000 and 2008, 1,341 new banks and 75 new credit unions were chartered.

Topline Witness Quotes:

“Lack of de novos has its roots in excessive regulation…Some have argued that bank lending continues and therefore, there has been no impact of Dodd-Frank. Banks continue to lend even with the shackles that bind them. However, in the five years since Dodd-Frank was enacted, the pace of lending was half of what it was several years before the financial crisis. Some banks have stopped offering certain products altogether, such as mortgage and other consumer loans” – Ken Burgess, Chairman, First Capital Bank of Texas

“Unfortunately, new credit unions like The Finest FCU are not being created due not only to the hurdles posed by initial start-up time and costs, but also the daunting over-regulation facing the credit union once its charter is granted. Many smaller credit unions are saying ‘enough is enough’ when it comes to the overregulation of the industry. The compliance requirements in a post-Dodd-Frank environment have grown to a tipping point where it is nearly impossible for many smaller institutions to survive, much less start from scratch. Credit unions want to continue to aid in the economic recovery, but are being stymied by this overregulation. We need regulatory relief – both legislatively and from the regulators.” – Keith Stone, President and CEO of The Finest Federal Credit Union

“[T]hese added costs occasioned by Dodd Frank, Basel III and discretionary supervisory action significantly impaired existing financial institutions’ ability to provide financial services and products to consumers in the communities they serve. Many banks exited the mortgage loan business because of the complexity and uncertainty resulting from Dodd Frank, the CFPB and related rulemaking.” – Patrick Kennedy, Managing Partner, Kennedy Sutherland LLP, on behalf of the Subchapter S Bank Association

Federal Reserve Chair Janet Yellen : "no amount of monetary policy stimulus can make up for the fiscal policy headwinds of a cumbersome, failed regulatory state, an uncompetitive tax code"

"Mother Goose " Testifies Before the Financial Services Committee


February 17,2017
one small voice


Wall Street , “Economic growth has been quite disappointing,” Federal Reserve Chair Janet Yellen acknowledged to the Financial Services Committee on Wednesday during her Semi-Annual Monetary Policy Report to Congress, echoing points made by Chairman Jeb Hensarling (R-TX) during his opening statement that Americans have suffered through eight years of subpar growth and stagnant paychecks.

“I believe the last eight years have shown that no amount of monetary policy stimulus can make up for the fiscal policy headwinds of a cumbersome, failed regulatory state, an uncompetitive tax code, Obamacare and Dodd-Frank,” Chairman Hensarling said. “All of these must be remedied and changed if we are to have a healthy economy for all and bank bailouts for none.”

Monetary Policy and Trade Subcommittee Chairman Andy Barr (R-KY) called for a strategy-based monetary policy rather than the Fed’s improvisational approach.

“The American people are ready for a change -- a change from the Fed's unconventional and unpredictable policies, a change from the Fed's inaccurate projections of growth, and a change from disappointing economic results. It's time for the Fed to begin prudently shrinking its balance sheet, end its easy money policies that have fueled government borrowing, and shift to a more firmly grounded strategy-based policy that will assure price stability, facilitate commerce wherever it shows promise, and create the conditions for strong economic growth,” he said.

Investing in Trump Economy W/ Ret. Wallstreet Billion Dollar Fund Manger James Foytiin

How We’ll Stop a Rogue Federal Agency

Congress can defund Elizabeth Warren’s unaccountable
and unconstitutional CFPB.
By: Jeb Hensarling
Wall Street Journal
February 9, 2017
The Obama presidency placed no greater burden on America’s growth potential than the avalanche of regulations that smother the U.S. economic system. The most destructive and dangerous of the new regulatory bureaucracies created by the Democrat-dominated 111th Congress is the Consumer Financial Protection Bureau.

The CFPB stands with ObamaCare as a crowning “achievement” of Mr. Obama’s transformation of America. With unprecedented automatic funding provided directly by the Federal Reserve, the agency is unanswerable to anyone. Democrats chose to insulate it from Congress, the president, voters and the democratic process. The U.S. Circuit Court of Appeals for the District of Columbia noted as much in its recent PHH v. CFPB decision, which ruled the bureau’s governing structure unconstitutional. The court said the unelected CFPB director “enjoys more unilateral authority than any other officer in any of the three branches of government of the U.S. Government, other than the President.”

The CFPB is arguably the most powerful, least accountable agency in U.S. history. CFPB zealots have the power to determine the “fairness” of virtually every financial transaction in America. The agency defines its own powers and can launch investigations without cause, imposing virtually any fine or remedy, devoid of due process. It requires lenders essentially to read their clients’ minds, know and weigh their clients’ comprehension levels, and forecast future risk. It can compel the production of reams of data and employ methodologies that “infer” harm without finding any specific instance of harm or knowing violation.

The regulatory web spun by the CFPB can make every provider of financial services guilty until proven innocent, inviting selective enforcement and financial shakedowns. The CFPB is the embodiment of James Madison’s warning in Federalist No. 47 that “the accumulation of all powers, legislative, executive and judiciary, in the same hands . . . may justly be pronounced the very definition of tyranny.”

This tyranny has harmed the very consumers it purports to help. Since the CFPB’s advent, the number of banks offering free checking has drastically declined, while many bank fees have increased. Mortgage originations and auto loans have become more expensive for many Americans.

No corner of American finance is beyond the CFPB’s grasp, even auto dealers—which are specifically excluded from its jurisdiction by the Dodd-Frank Act. To dodge this legal constraint, the CFPB regulates auto dealers through enforcement “bulletins” on auto lenders, employing statistical analysis rather than specific acts to charge lenders with discriminatory lending. The race of borrowers is inferred based on the borrowers’ names and home addresses. Through this ruse they smear and shake down lenders.

The House in 2015 voted 332-96—with 88 Democrats in support—to force the CFPB to rescind its auto-lending guidance. Sen. Elizabeth Warren, the intellectual mother of the CFPB, led Senate Democrats’ opposition to the bipartisan bill. This is a sign the 52-member Senate Republican majority probably will be unable to overcome Democrat filibusters on legislation limiting the CFPB’s powers.

President Trump should immediately fire CFPB Director Richard Cordray, citing the president’s constitutional responsibility to take care that the laws are faithfully executed. A new director could first undo all harmful actions taken by the CFPB during the Obama era. He could then implement policies that actually benefit consumers, such as limits on class-action lawsuits wherein plaintiff law firms get fortunes but injured financial consumers get pennies.

The CFPB could also protect Americans from government abuses. A new director could penalize government bond issuers that fail to disclose unfunded pension liabilities. It could also put an end to government accounting and solvency standards that, if adopted by private companies, would result in fines or a firm’s closure.

Yet even with good policy, the CFPB would still be unconstitutional. For those who reject Sen. Warren’s view that the ends justify the means, the agency must be functionally terminated. Consumer protection can instead come through an accountable and constitutional process.

The Senate can achieve this with a simple majority vote. Dodd-Frank requires the Fed to fund all CFPB budget requests automatically—creating an estimated $6.6 billion funding stream over the next 10 years. Under a budget process known as reconciliation, the House Financial Services Committee, which I chair, and the Senate Banking Committee could be mandated to save $6.6 billion over 10 years of the budget. In the ensuing reconciliation bill the two committees could then direct the Fed to terminate CFPB funding. Senate Democrats could not filibuster the bill.

Congress could then transfer the CFPB’s consumer protection role to the Federal Trade Commission or back to traditional banking regulators, where it resided before the CFPB’s creation. A Senate point of order requiring 60 votes could be brought against these provisions, on the ground that they don’t belong in a reconciliation bill. The advantage of putting the restructuring language in the reconciliation bill is that if Democrats use the point of order to strike the language, they—not Republicans—would have elected to end all CFPB funding, leaving the new system of consumer financial protection to be decided in future legislation.

When Democrats sought to take consumer protection outside the democratic process, consumers were harmed by a reduction in competition. With fewer lenders serving fewer borrowers, fewer businesses employed fewer workers. A healthy economy is the first casualty of any war on credit, and a loan denied becomes a job lost. The CFPB has eroded freedom, trampled due process and killed jobs. It must go.

House Acts to Requires Cost Benefit Analysis of all SEC Regulations

January 13,2017
the staff of the Ridgewood blog


WASHINGTON - The House approved bipartisan legislation on Thursday to ensure that the benefits of proposed regulations from the Securities and Exchange Commission (SEC) justify the costs to jobs, economic growth, and capital formation.

The SEC Regulatory Accountability Act, sponsored by Financial Services Committee member Rep. Ann Wagner (R-MO), passed 243-184.

“Ill-advised laws like the Dodd-Frank Act empower unelected, unaccountable bureaucrats to callously hand down crushing regulations without adequately considering what impact those regulations have on jobs,” said Committee Chairman Jeb Hensarling (R-TX). “The true cost of Washington red tape includes the jobs not created, the small businesses not started and the dreams of our children not fulfilled.”

Under the bill, before issuing a regulation the SEC will be required to:

identify the nature and source of the problem its proposed regulation is meant to address; utilize the SEC’s Chief Economist to assess the costs and benefits of a proposed regulation to ensure the benefits justify the costs; identify and assess available alternatives; and ensure that any regulations are consistent and written in plain language.

Further, the legislation requires the SEC to engage in a retrospective review of its regulations every five years and conduct post-adoption impact assessments of major rules.

Banks to Donald Trump: Don’t Kill Dodd-Frank

pic CEO of JP Morgan Jamie Dimon

Bankers admit they love the guaranteed bailouts, lack of competition and regulated margins of Dodd-Frank
December 10, 2016
the staff of the Ridgewood blog

Ridgewood NJ, Big banks have an unexpected message for President-elect Donald Trump: Don’t trash the Dodd-Frank Act.“We’re not asking for wholesale throwing out Dodd-Frank,” J.P. Morgan Chase & Co. chief James Dimon said at a financial-services conference this week where he and other big-bank executives spoke, often addressing potential regulatory changes for the first time since the election.

During his presidential campaign, Republican Donald Trump said he would "get rid of" Dodd-Frank — the sweeping legislation passed in 2010 to address problems underlying the 2008-2009 financial crisis. Dodd-Frank a 2200 page monstrosity , was passed by congress like Obamacare without anyone reading the legislation , that is except for former NJ Congressmen Scott Garrett.

Dodd-Frank turned banks into utilities and did nothing to solve the ills that caused the banking crisis in 2008 ,it basically institutionalized the bad behavior that created the problem, put the bad debt in suspended animation and put taxpayers on the hook with its "too big to fail" provisions creating "Bailout Nation".Too big to fail also implies the corollary to big to really succeed.

Former Fed Chair Alan Greenspan called "too big to fail" legislation a "moral hazard" , giving bankers the excuse to engage in activities that would otherwise risk their livelihoods, feeling confident in ever larger government ie taxpayer bailouts.

Some in Washington have called for full repeal of Dodd-Frank, the legislation passed in 2010 that imposed new constraints on banks and created new agencies like the Consumer Financial Protection Bureau. A proposal that would effectively replace Dodd-Frank, by Rep. Jeb Hensarling, the Republican chairman of the House Financial Services Committee, has gained momentum since the election.

The Trump team has talked about dismantling the law, although it has yet to state clearly whether this would involve a repeal of Dodd-Frank. Bank stocks have soared about 20% since the election, partly on the belief President-elect Donald Trump in some way will lighten banks’ regulatory load.

While banks favor a paring back of regulation, they tend to think in practical terms, rather than ideologically. And their core message seems to be: Make regulation simpler and less costly but don’t return banking to the Wild West days that preceded the financial crisis.

In many ways that is understandable. Banks have spent half a dozen years and hundreds of millions of dollars to adapt to the new landscape. This has caused them to exit businesses such as proprietary trading, rejig their corporate structures to make them safer and focus more on clients’ needs. While tearing up Dodd-Frank would seem to unshackle banks, starting with a new regulatory playbook would upend their new business models and divert management.

One of the biggest concerns for banks is that things don’t get worse. “The first thing I would ask for is nothing new, no new rules,” Citigroup Inc. finance chief John Gerspach said at the conference. “If you haven’t figured out yet how all the existing rules work together, don’t put on anything else.”

Banks acknowledge benefits to the new rules, noting they have helped improve the way firms manage risks and view their businesses. U.S. bankers have also said that having been forced to hold more capital, and build it quickly after the financial crisis, made their firms far stronger than troubled European peers.

So what would the big banks like to see changed?

Stress Tests—These annual exercises conducted by the Federal Reserve have become hugely important because they govern the amount of capital banks can return to shareholders, either through buybacks or dividends.

Banks want these to be based more on objective criteria and they want to have more of a view into the testing process and the Fed’s decision-making. And they should take less time and money to comply with, bankers say.

Bill Demchak, CEO of PNC Financial Services Group Inc., said his bank could theoretically get all the benefits of the stress-testing process with “60% of the effort.” He said that to comply with the tests, “you bring the place to a grinding halt once a year.”

The Volcker Rule— Banks say they aren’t eager to get back into the business of speculating on market moves using their own balance sheets. But they want the process around the Volcker Rule to be less burdensome and administered by fewer than five agencies.

Changes in this area could “probably make it easier to make markets” and improve liquidity, likely benefiting investors and other issuers, said Mr. Dimon.

“You have active market-marking in lumber, rebar, chicken, pork, cotton; we need it in financial instruments, it’s not different,” he said. "I do think a little more liquidity could be good.”

Mr. Gerspach said Citigroup would like less paperwork. “We don’t want to do proprietary trading,” he said. “But I also would love to work with regulators to lessen the burden of proving that we’re not engaging in proprietary trading.”

Capital and Liquidity—Banks say there are so many new rules relating to so many areas of their balance sheets that they too often run the risk of working against each other. And it isn’t clear when enough capital really is enough.

Wells Fargo chief Timothy Sloan cited differences between rules about how much capital a bank must hold and the amount of liquid assets a firm has to keep on hand. The intersections of these rules, bankers argue, hampers lending.

Bankers would also like more clarity around how much capital is enough for banks. Regulators have applied various capital surcharges to the biggest banks and these can change as regulations evolve.

“It’s getting certainty around the ability to have access to your capital return once you’ve met all the hurdles and whether those hurdles move up or down because of various people’s point of view,” said Bank of America Corp. chief Brian Moynihan.

J.P. Morgan’s Mr. Dimon said that regulators’ authority should be “cut back a little bit. It should be more prescriptive in exactly what they’re trying to accomplish.”

For all that, bankers are taking a wait-and-see stance before making any big changes to their businesses. “I think the difference going into 2017 is that we do have hope,” Citigroup’s Mr. Gerspach said. “But…we can’t build a plan on hope.”

The fact that the culprits of the Financial Crisis in 2008 are now opposing the repeal of Dodd-Frank is further evidence that things need to change dramatically . The entire financial sector of the economy has been moribund under Dodd-Franks government imposed socialism . A vital and growing financial sector is paramount to an active and growing economy .

Federal court rules the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional

“All government bureaucracies should be accountable to hardworking taxpayers”

October 11,2016
the staff of the Ridgewood blog

Ridgewood NJ, Financial Services Committee Chairman Jeb Hensarling (R-TX) released the following statement on today’s federal court ruling that the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional:

“This is a good day for democracy, economic freedom, due process and the Constitution. The second highest court in the land has vindicated what House Republicans have said all along, that the CFPB’s structure is unconstitutional.

“By design the CFPB is arguably the most powerful and least accountable Washington bureaucracy in American history, and it shows. The Bureau has infringed on the economic freedoms of consumers, limited their financial choices, increased their costs, and failed to hold managers accountable for widespread discrimination and abuse of its own employees. This must change. The CFPB has an important mission. Properly designed and led, it is capable of great good. But the Bureau’s bizarre and defective structure allows it to evade the time-tested checks and balances that are necessary to hold it or any other government bureaucracy accountable. Our Constitution requires these checks and balances to protect our God-given liberties from government abuse. It is astonishing that the Democrats who voted for the Dodd-Frank Act so casually disregarded their constitutional obligations to the American people. It’s also astonishing that President Obama illegally bypassed the Senate by appointing Richard Cordray to serve as the Bureau’s Director. It is time to restore the rule of law and Constitutional governance to this nation. While I welcome today’s decision, it’s absurd that a judicial opinion was necessary.

“The Financial CHOICE Act, approved by our committee last month, solves the constitutional defect identified by the court today. The Financial CHOICE Act replaces the current unaccountable single director with a bipartisan, five-member commission – which is how virtually every independent regulatory agency, including those responsible for consumer and investor protection, currently operates.

“Republican efforts in the Financial CHOICE Act to reform the Bureau are and have always been grounded in the fundamental belief that all government bureaucracies should be accountable to hardworking taxpayers, especially those bureaucracies like the CFPB that can spend hundreds of millions of dollars each year with no oversight or control from Congress or the executive branch; employ an army federal employees; and have a direct impact on the personal finances of virtually every American citizen.”

http://theridgewoodblog.net/federal-court-rules-the-structure-of-the-consumer-financial-protection-bureau-cfpb-is-unconstitutional/

"the CHOICE Act offers us a way out by pointing us towards a system that will allow the market to determine the risk of a financial institution, and make it unlikely that taxpayers will ever be called on again to bail out Wall Street and the bad decisions of regulators who oversee it" Rep. Scott Garrett CD5

Norbert Michel / @norbertjmichel / September 20, 2016

On Tuesday, Sept. 13, the House Financial Services Committee passed the Financial CHOICE Act. Among other needed financial reforms, the bill would make taxpayer-funded bailouts of big banks less likely and ease regulations that hurt community banks.

It’s hardly a surprise that the vote (30–26) was largely along party lines, but some of the anti-CHOICE Act rhetoric was disturbing. Just as with the 2010 Dodd-Frank Act, it appears that fear-mongering and special interest lobbying will prevent real financial reforms from even being debated.

Only one of the bill’s 11 sections deals with reform of the Consumer Financial Protection Bureau (CFPB), but opponents are doing their best to tie this entire debate to the CFPB and Wells Fargo. In the process, they’re presenting Americans with a false choice: leave the CFPB alone and remain safe, or reform the CFPB and drown in fraud.

Ranking member Maxine Waters, D-Calif., proclaimed:

We need to look no further than just last week to see why we need a strong Consumer Financial Protection Bureau, which used its authorities under Dodd-Frank to uncover a massive scheme under which millions of consumer accounts at Wells Fargo were fraudulently opened, with the bulk of this fraud perpetrated in my hometown of Los Angeles.

One serious problem with this logic is that the fraud occurred just prior to 2014, almost two years after the CFPB was up and running. And the CFPB didn’t uncover it.

If the CFPB is so vital for fraud protection, what happened?

But what good is logic when the objective is to scare everyone into believing Dodd-Frank and the CFPB make us safer? Fear-mongering is a tried and true Washington tactic, especially when it comes to financial markets.

And it’s not just politicians who use fear-mongering. Special interest groups use the same ploy, and the retail trade associations’ opposition to the CHOICE Act’s repealing of the so-called Durbin Amendment is the perfect example.

The Durbin Amendment, named after Illinois Senator Dick Durbin, imposed a price cap on the debit card interchange (“swipe”) fees that banks charge for using their cards. Supposedly, retailers everywhere were going to pass these savings on to their consumers.

As was easily predicted, consumers haven’t saved at all. Even Barney Frank admits that consumers didn’t see any benefit from the price cap.

Instead, retailers have benefited from the lower fees without lowering their customers’ prices. Worse, consumers have lost out on low-cost banking services because banks raised other fees to compensate for their lost revenue.

Need more evidence?

It’s not the consumers clamoring for the House to leave price controls in place. It is business and retail trade associations, such as the National Grocers Association, the Society of Independent Gasoline Marketers of America, and the National Restaurant Association.

There’s no doubt that these groups’ members have a difficult time running a profitable business, but so does everyone. Instead of pushing back on the CHOICE Act over one tiny section—one that would benefit millions of consumers—these groups should push for large-scale relief of the regulations that make it so difficult for their members to earn money.

Supporting the types of reforms in the CHOICE Act would be a great place to start.

http://theridgewoodblog.net/opponents-of-choice-act-arent-interested-in-protecting-consumers/