May 02, 2017

When it Comes to Helping Main Street, the Choice is Simple

Post by Geoff Holtzman

Today, the House Committee on Financial Services will mark up the Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act, legislation that promotes economic growth and eliminates harmful regulations while still providing reasonable oversight for financial institutions and Wall Street regulators.

Freedom Partners recently signed onto a coalition letter in support of many provisions within the legislation, which unleashes opportunities for small businesses and innovators and repeals the worst provisions of the ill-conceived 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

Passed in response to the recession, Dodd-Frank has protected big banks and big businesses by codifying taxpayer bailouts for “too big to fail” financial institutions, and has imposed 3,500-plus pages of new rules and regulations that have run local community banks out of business, restricted access to credit for investors and homebuyers, raised lending costs, and reduced access to capital for small businesses.

Dodd-Frank also created the Consumer Financial Protection Bureau (CFPB), an unaccountable Washington bureaucracy that has failed to prevent financial fraud, as evidenced by the recent Wells Fargo banking scandal, in which over one million unauthorized checking accounts were opened.

Meanwhile, the law has hurt taxpayers, entrepreneurs, and small businesses on Main Street through banking fee hikes, the loss of free checking services, the closure of small banks, and the contraction of credit.

Before Dodd-Frank, 75 percent of banks offered free checking services to customers, but just two years after the law took effect only 39 percent of banks offered free checking. In addition, the number of small banks has declined from 8,263 in 2000 to 5,961 at the end of 2014. This hurts local borrowers, who must turn to larger banks where they face higher rates or are flat out rejected.

It’s time to rethink how Wall Street firms, Main Street banks, and Washington interact, and the CHOICE Act is a positive first step on the road to eliminating Dodd-Frank and its burdensome regulations that have restricted business creation, innovation, and entrepreneurship. By finally ending bank bailouts, reducing red tape, and empowering small businesses and consumers over Washington bureaucrats, the CHOICE Act will help begin restore economic opportunity for all Americans.