CFS Hearing – “A Legislative Proposal to Create Hope and Opportunity for Investors, Consumers, and Entrepreneurs”

Posted April 27, 2017

On April, 26, 2017, The Committee on Financial Services held a hearing entitled “A Legislative Proposal to Create Hope and Opportunity for Investors, Consumers, and Entrepreneurs.”
 
Witnesses:

  • Mr. John Allison: Former President and Chief Executive Officer, Cato Institute
  • Dr. Norbert J. Michel: Senior Research Fellow, Financial Regulations and Monetary Policy Institute for Economic Freedom and Opportunity, The Heritage Foundation
  • Ms. Hester Peirce: Director of Financial Markets Working Group and Senior Research Fellow, Mercatus Center
  • Mr. Alex J. Pollock: Distinguished Senior Fellow, The R Street Institute
  • Mr. Peter J. Wallison: Senior Fellow and Arthur F. Burn, Fellow in Financial Policy Studies, American Enterprise Institute
  • The Honorable Michael S. Barr: Professor of Law, University of Michigan Law School
  • Dr. Lisa D. Cook: Associate Professor, Economics and International Relations, Michigan State University

This hearing examined a discussion draft of the “Financial CHOICE Act of 2017,” which the Committee publicly released on April 19, 2017. A summary of the bill can be found here.
 
Key Takeaways

  • Chairman Hensarling maintains that the Dodd Frank Act reduced access to banking services for the underbanked, increased the number of unbanked by three million, reduced credit to consumers and businesses and largely eliminated free checking accounts.
  • Democrats on the Committee contend that the provisions in the bill are not meant to benefit small financial institutions and instead are meant to benefit large financial institutions – many of whom are responsible for creating the financial crisis. 
  • There was vigorous debate about the impact of the Volker Rule and its impact on the strength of banks, the merits of the Feds SIFI designation authority and what if any impact Dodd Frank has had on small financial institutions.
  • Much debate was dedicated to the impact of the CFPB on consumers – the agency would be made subject to the annual appropriations process and the Director an at-will position under Choice 2.0. 
  • There was very little discussion of the Durbin Amendment. It is still unclear if there will be an amendment in Committee to strike the Durbin repeal language and who might offer that amendment. 
  • One important note – a tie vote on a Committee Amendment means that it fails and the repeal language would stay in the bill. 
  • Ranking Member Waters has formally requested another hearing on the Choice 2.0 legislation. Under the rules, the Minority Day is a continuation of today’s hearing. The mark-up of the bill is scheduled for May 2, and there is no indication that the mark up date will change. Therefore, any date that is offered for a Minority hearing may not be appealing to RM Waters.
Access: Public