Thursday, July 14, 2016

Financial CHOICE Act

In May, the Republicans announced they had a plan to replace Dodd-Frank, stating that, “Nearly six years since its enactment, we should look around and ask ourselves if any of Dodd-Frank's promises have come to fruition. Is our economy more stable? Are taxpayers no longer on the hook for bailouts? And are Americans better off today than they were six years ago? The answer is a resolute no,” - Congressman Blaine Luetkemeyer in an article for CNBC (found here).

Why do Republicans hate Dodd-Frank so much?
Well, primarily it is the CFPB, Consumer Financial Protection Bureau, that they have an issue with. Jeb Hensarling, a Republican from Texas stated, "The CFPB undoubtedly remains the single most powerful and least accountable federal agency in all of Washington,” and Senator Ted Cruz called it “a runaway agency” when he introduced his measure to abolish the CFPB outright.

The Republicans alternative to Dodd-Frank is called The Financial CHOICE Act. CHOICE stands for ‘Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs’, and in the Final Summary of Key Provisions (you can read the document in full here), they list six key principles, which are summarized as:
  1. Repealing most of Title I and all of Title VIII of Dodd-Frank, to reform the FSOC by repealing their ability to designate “Too Big To Fail” companies
  2. Repeal Title II of Dodd-Frank,  which allows federal regulators to close down troubled financial firms with little judicial review
  3. Reforms the CFPB into more of a commission, like the SEC
  4. Restricts the Federal Reserve’s emergency lending authority to make it more difficult to give bailout-style loans
  5. Eliminates the Volcker rule, which prohibits banks from risky investing
  6. Puts agencies under the Executive in Need of Scrutiny Act which requires all new major rules to be approved by Congress
  7. Strengthens penalties for fraud
While the future of the Financial CHOICE Act is still uncertain, it is already generating a lot of talk. What do you think? Let us know in the comments!

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