[Congressional Record Volume 161, Number 115 (Wednesday, July 22, 2015)]
[House]
[Pages H5386-H5393]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  FIFTH ANNIVERSARY OF DODD-FRANK ACT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2015, the gentleman from Texas (Mr. Hensarling) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. HENSARLING. Mr. Speaker, there are a number of us who are 
gathered for a very important discussion tonight regarding the fifth 
anniversary of the Dodd-Frank Act.
  Before we do, there is another important anniversary that needs to be 
recognized in America today. For that, Mr. Speaker, I am happy to yield 
to the gentleman from Illinois (Mr. Shimkus).


           65th Wedding Anniversary of Gene and Kathy Shimkus

  Mr. SHIMKUS. Mr. Speaker, I rise today to give thanks to God and 
publicly celebrate the 65th wedding anniversary of my mom and dad, Gene 
and Kathy Shimkus.
  Dad was raised by his grandparents, Charles Frederick and Dorothea 
Heinicke. He has been a lifetime member at Holy Cross Lutheran Church 
and School. Mom was raised in State Park, just down the road from 
Collinsville, by Harvey and Myrtle Mondy.
  They are both graduates of Collinsville High School, dad in 1946 and 
mom in 1949. Dad started working for the telephone company in high 
school, and mom worked as a telephone operator.
  Mom and dad got married on July 22, 1950, 65 years ago today. Dad was 
drafted during the Korean war and left for Korea. On August 3, 1951, 
their first child, Bill, was born. Dad returned from the war and 
continued to work for the telephone company and then various telephone 
companies as the industry changed. Using the GI Bill, he also received 
his associate's degree from Southern Illinois University Edwardsville.
  Mom started her career and one that she has kept throughout known 
time as mother and now matriarch of the family. From here, the family 
grew as Dorothy, Joan, Helen, Jean, Jana, and I were born. The kids 
grew up to become a pastor, teacher, healthcare worker, CPA, and even a 
politician.
  Bill now lives in the Northwest and is married to Bette. They have 
three children, Matthew, Maria, and Emily. Dorothy has two boys, Terry 
and Dusty. Joan is married to Bernie and has two children, Niki and 
Tim. Karen and I are married with sons David, Joshua, and Daniel. Helen 
is married to Pat and lives in Tennessee. They have two daughters, 
Jennifer and Katelyn. Jean has two sons, Adam and Gene, as well as a 
daughter, Elizabeth. Jana is married to Chris. There are nine great-
grandchildren.
  In an era where everything seems to be disposable, it is helpful and 
uplifting to see something that has lasted. For things to last, you 
have to work at it.
  Thank you, Mom and Dad, for teaching us about life. We have survived 
the good and the bad and, for the most part, have done it united as a 
family. The Shimkus clan will celebrate this accomplishment through 
this weekend by just spending time together.

[[Page H5387]]

  Our gathering culminates with attending church together on Sunday. We 
have much to be thankful for, but mostly for God's undeserved love in 
sending his son, Jesus, to die on the cross and rising again for our 
salvation.
  Congratulations, Mom and Dad, and thank you for being the parents 
that you are.


                             General Leave

  Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
and to include extraneous material on the subject of the Special Order.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. HENSARLING. Mr. Speaker, before we get started, I just want to 
thank the gentleman from Illinois to remind us of what is truly 
important in life having much to do with our faith and our family, and 
I thank him for allowing us to be a part of that very special moment 
for him and his parents and his whole family tonight.
  Now, to the topic of tonight, Mr. Speaker. This week marks the fifth 
anniversary of the passage of the Dodd-Frank Act, which was passed in 
the wake of the great financial crisis of 2008.
  We were told at the time, Mr. Speaker, that it would lift our 
economy, end too big to fail, and promote financial stability. We now 
have 5 years of data; we have 5 years of experience. The evidence is 
overwhelming, Mr. Speaker: 5 years after the passage of Dodd-Frank, the 
big banks are bigger; the small banks are fewer; the taxpayer is 
poorer.
  We will explore over the next hour, Mr. Speaker, all the different 
ways that regrettably, regardless of what good intentions might have 
been behind this 2,300-page bill--the most massive rewrite of our 
financial laws in America since the New Deal, 400-plus new rules that 
have been promulgated, only two-thirds of which--or not quite two-
thirds have been finalized.
  What this has done in many ways, Mr. Speaker, is to make the American 
people and our economy less stable, to make us less prosperous and, 
most importantly, Mr. Speaker--and most regrettably--how this law has 
made us less free.
  We need to work together. House Republicans are working to ensure 
that every American has economic opportunity to climb the ladder of 
success, to pursue happiness, to achieve financial security.
  Today, 5 years after Dodd-Frank, we have way too many low- and 
moderate-income Americans who lose sleep at night worrying about their 
meager paychecks, worrying about their shrinking bank accounts, and 
worrying about their children's future because, again, Mr. Speaker, 
Dodd-Frank has made us less stable, it has made us less prosperous, it 
has made us less free.
  Mr. Speaker, I am joined by many Members of the House Financial 
Services Committee that I have the honor and responsibility to chair. I 
am so proud to call them colleagues and for their great work, to try to 
extend, again, economic opportunity and financial security to all 
Americans. They know firsthand how working men and women have suffered 
under this Dodd-Frank Act lo these many years.
  I want to start out yielding to the gentleman from New Jersey (Mr. 
Garrett), who happens to be the chairman of the Capital Markets and 
Government Sponsored Enterprises Subcommittee.
  He knows firsthand that in order to have the benefits of free 
enterprise, in order for small businesses to be capitalized, you have 
to have very vibrant and healthy capital markets.
  Probably more so than anyone in Congress, he is most qualified to 
talk to us about what Dodd-Frank has done to our capital markets and 
what it has done to stability, what it has done to prosperity, and what 
it has done to freedom.

                              {time}  1945

  Mr. GARRETT. I thank the gentleman from Texas for holding this 
Special Order tonight.
  Mr. Speaker, birthdays are usually a cause of celebration, but, this 
week we mark 5 years--the 5th birthday--of one of the most overreaching 
and damaging laws in recent memory that was heaved on our economy.
  Now, when the Democratic majority passed Dodd-Frank, there were three 
big promises they made about this legislation, first, that the 
legislation would end too big to fail; second, that the legislation 
would protect consumers; and, third, that Dodd-Frank would make our 
economy more competitive.
  Why don't we take a look at each one of those one by one and see how 
they have worked out so far.
  Promise number one, Dodd-Frank will end too big to fail.
  First, did Dodd-Frank really end too big to fail?
  For starters, by just about every measure, the biggest banks today 
are even bigger than they were before the financial crisis while 
community banks and other small lenders continue to be shut out and 
shut down around the country.
  In fact, according to recent statistics, the five largest banks in 
the Nation now control roughly half of all of the assets in our banking 
system. To put that in another perspective, that means that outside of 
these institutions it takes the collective assets of over 6,000 banks 
in order to equal the number of assets held by the five largest banks.
  Moreover, the so-called resolution authority included in title II of 
Dodd-Frank is not, as our former colleague Barney Frank put it, a death 
panel for banks. It is, in fact, instead, a mechanism for future 
bailouts enshrined now into the law.
  This is not just a case of baseless accusations. One need only look 
at the actual text of Dodd-Frank to understand how it allows for big 
banks to be bailed out--by whom?--by you, the American taxpayer.
  For example, Dodd-Frank gives the FDIC, the Federal Deposit Insurance 
Corporation, the authority to do two things, first, purchase the debt 
from the creditors of a failing institution at par or even above par 
and, two, pay any obligations of an institution that it believes are 
necessary and appropriate during that time of crisis.
  Dodd-Frank, of course, also created the so-called FSOC. What is that? 
That is the Financial Stability Oversight Council, which during its 
current existence has done virtually nothing to enhance the stability 
of the financial market.
  In fact, if you look at it through its systemically important 
designations of institutions, FSOC has gone in the other direction in 
that it has now put taxpayers on the hook not just for banks and bank 
bailouts, but for the potential bailout of nonbank institutions as 
well.
  So a law that has made the big banks bigger, that has given 
regulators such a vast expansion of authority, and that has put 
taxpayers now at so much risk cannot conceivably be described as having 
ended too big to fail.
  It is not just those on our side of the aisle who are skeptical of 
Dodd-Frank's claims. Here are two examples.
  The GAO, in a January 2013 report, concluded that there ``is no clear 
consensus on the extent to which, if at all, the Dodd-Frank Act will 
help reduce the probability or severity of a future crisis.''
  Cornelius Hurley, a former senior official at the Federal Reserve, 
stated recently, ``If the whole purpose of Dodd-Frank was to eliminate 
the concept of too-big-to-fail and you judge it by that standard, then 
it's a failure.''
  So, by any objective measure, it is clear, I think, that they failed 
at promise number one.
  Let's look now at promise number two, Dodd-Frank will protect 
consumers.
  How has it protected consumers?
  On this matter, it depends, in large part, on what you mean by 
consumer protection.
  You see, the drafters of Dodd-Frank and many of my colleagues on the 
other side of the aisle believe that consumer protection involves 
complete bureaucratic control over the entire credit market, which 
gives a handful of individuals right here in Washington, D.C.--the 
bureaucrats--the ability to decide what kind of mortgage you want, what 
kind of credit card you are going to get, the kind of student loan 
Americans should have access to, and so on.
  Hence, the creation of the unaccountable CFPB and the incredible 
amount

[[Page H5388]]

of authority now that they have been given is given to a single agency 
or, actually, to a single dictator there, if you will.
  Real consumer protection doesn't involve unelected and unaccountable 
bureaucrats who make decisions on behalf of you, the American citizen. 
No.
  Real consumer protection involves ensuring competitive credit markets 
and empowering the consumers to make their own choices based off of 
well-disclosed information in the marketplace. By this measure, Dodd-
Frank and the CFPB have again failed miserably.
  Take, for example, the CFPB's qualified mortgage rule, which became 
effective just last year. According to a study from the Federal Reserve 
Board, roughly one-quarter of Americans right now who obtained 
mortgages in 2010 would not have qualified for those mortgages that 
they did get under the QM rule, increasing the likelihood then that 
millions of Americans will find it harder in the future to actually 
qualify for a mortgage.
  Moreover, the effect of QM is even more pronounced on certain 
segments of the economy, such as minority borrowers. The same Federal 
Reserve study noted that about one-third of both African Americans and 
Hispanic borrowers would have been ineligible to have gotten a mortgage 
under the QM loan.
  Many of the Bureau's initiatives regarding credit cards and other 
loans will ultimately have the same effect, making it either impossible 
or too expensive for individuals who are starting businesses to draw on 
a line of credit.
  So it is clear that, on promise number two, Dodd-Frank is not 
protecting consumers and that it is, in fact, harming consumers and 
making it harder for them with all of this red tape.
  The next and final promise, number three, is that Dodd-Frank will 
make our economy more competitive:
  The third promise, that it will make our economy more competitive, 
clearly has not come true. In fact, Dodd-Frank is a direct cause of the 
economic struggle that millions of Americans continue to face today.
  For a minute, just take a look at the sheer breadth of regulation 
that has come out of Dodd-Frank. The law provides so much regulation 
that it is a burden on the economy.
  The Davis Polk law firm performed a public service back in 2013 when 
it estimated at the time that, for every one word of text in Dodd-
Frank, 42 words of regulations have been produced. Since that time, the 
number has even grown.
  How can our economy possibly be more competitive today when such a 
huge number of complex and burdensome regulations have been implemented 
over the last 5 years?
  We need to look no further than the growth of our economy to figure 
this out, which actually shrank during the first quarter of this year, 
another reminder that we remain mired in the weakest economic recovery 
since World War II.
  So Dodd-Frank has actually served to weaken our economy, not to have 
strengthened it, and the millions of Americans who have experienced a 
weak job market and decreased opportunity are the ones that are feeling 
the pain of Dodd-Frank.
  Since 2011, the Financial Services Committee, under the chairmanship 
of Jeb Hensarling from Texas, has led the charge to roll back some of 
the most damaging provisions of Dodd-Frank, and I commend the chairman 
and all of my colleagues on the committee for their continued efforts 
in this regard.
  Unfortunately, it now appears that many of these efforts, which used 
to be bipartisan in nature, are running up against the rigid ideology 
which believes that Dodd-Frank was chiseled into stone and should never 
be changed.
  I believe that their view is unsustainable as we continue to see 
evidence of the harm that Dodd-Frank is inflicting upon Americans, and 
hard-working Americans at that.
  Our committee and this Congress must continue to do the important 
work that will make it easier for our fellow citizens to get a job, to 
obtain a credit card, to obtain a mortgage, and to create opportunities 
for themselves and their families.
  Mr. HENSARLING. I thank the gentleman for his comments tonight, and I 
thank him for his leadership on our committee.
  Again, Mr. Speaker, it is the unhappy occasion of the fifth 
anniversary of the signing of the Dodd-Frank Act, again, weighing in at 
2,300 pages.
  It is so sad to realize, as the gentleman from New Jersey pointed 
out, that so many of the promises that were made have not been kept and 
they have not been realized.
  Again, the big banks are bigger, the small banks are fewer, and our 
hard-working constituents--many of them--are worse off. Many of them 
have stagnant paychecks. And so many of them have smaller bank 
accounts. What they have seen is free checking cut in half in America, 
and bank fees have gone up.
  This is all because of the Dodd-Frank law putting an incredible mass 
of regulations upon our community banks and on our credit unions, those 
who serve our hard-working families and our small businesses. 
Regrettably, in so many different ways, we are less prosperous, we are 
less stable, and we are less free.
  I was there 5 years ago, Mr. Speaker, at the conference committee. 
Republicans had an alternative. We had a bill that, frankly, was 
written and filed before the Democrat bill was, but there was no 
willingness to negotiate, no willingness to discuss, no willingness to 
compromise. So we ended up with Dodd-Frank, and the American people are 
poorer because of it.
  Now, Mr. Speaker, I am very happy to yield to the gentleman from 
Illinois (Mr. Hultgren), a very hard-working member of our committee, a 
gentleman who brings a lot of expertise to this committee on a number 
of matters, especially insurance, which is near and dear to the 
financial security of so many of our constituents, and I am happy to 
get his views on this anniversary of Dodd-Frank.
  Mr. HULTGREN. Mr. Speaker, I rise today to mark 5 years of overly 
burdensome and costly banking regulations and a failed opportunity to 
address fundamental problems in our economy.
  Leading up to 2008, a perfect storm of easy lending, pushed by 
Washington bureaucrats, coupled with a spider web of duplicative, 
conflicting, and nonsensical regulations, led to a complete breakdown 
of the housing market.
  A lack of regulation was not the problem. In fact, regulation 
increased in the 10 years leading up to the crisis. Community banks 
were faced with determining which of several regulators to answer to 
first.
  Small businesses faced ever-expanding compliance mandates, raising 
the cost of doing business. Yet, at the time, those in power seized on 
the opportunity to never let a serious crisis go to waste in order to 
reward regulators with much more authority.
  The fundamental issues of the housing crisis were never addressed. 
Those who put in place the policies that encouraged risky borrowing and 
lending were never held accountable.
  Instead, the Dodd-Frank Act doubled down on the misguided government 
policies that caused the crisis, doing nothing to stop another from 
happening in the future.
  Dodd-Frank's vast expansion of regulatory authority has not helped 
lift the economy or helped Americans looking to pursue opportunities 
for themselves and their families.
  It failed to end too big to fail. It failed to protect consumers who 
rely on the community banks in their local towns. It failed to help 
small businesses in search of funds to restart and rebuild. It failed 
to tackle much-needed housing reform. And it failed to protect 
Americans from a power-hungry, regulation-happy Federal Government that 
was bent on expanding its power.
  Five years later, struggling families, struggling small businesses, 
and struggling community banks are the collateral damage of Dodd-Frank 
and its thriving Washington regulators.
  The largest institutions have gotten larger. More than 500 community 
banks have failed. And the number of bank options available to 
consumers continues to decline due to crushing regulatory burdens. This 
disturbing trend must be reversed.
  Regulation must not be one size fits all. Banking regulators should 
tailor regulations for community banks, those local financial 
institutions that partner with families and small businesses to help 
strengthen our communities.

[[Page H5389]]

  Decreasing the regulatory burden will allow our Nation's financial 
institutions to devote more time to the needs of consumers instead of 
devoting more time to the whims of regulators like the CFPB. Decreasing 
the regulatory burden will allow local banks to create innovative 
financial products and services for the benefits of their customers.
  Even as Dodd-Frank remains in effect, I and the Financial Services 
Committee will continue to stand up for Americans and stand against an 
overreaching Federal Government.
  On this anniversary of the law, now is the time to recognize and to 
respond to Dodd-Frank's vast imperfections and to also pursue true 
housing reform that promotes responsible lending and borrowing.
  Again, I thank Chairman Hensarling for his great work, and I thank my 
colleagues on the Financial Services Committee.
  Mr. HENSARLING. Once again, I thank the gentleman for his comments 
and for reminding us, yet again, that the narrative that the left has 
fostered is a false narrative.
  Mr. Speaker, we were told that there was this massive deregulation 
that somehow led to all of these bad mortgages and that the world was 
blowing up. Yet, as the gentleman from Illinois pointed out, for 10 
years, we have had increased regulation.
  It has increased, I believe, by almost 20 percent more in 
regulations. You had Sarbanes-Oxley. You had FIRREA. You had FDICIA. We 
are very good at acronyms in Congress, but we had more and more 
regulation.
  It wasn't deregulation that caused the crisis. It was dumb 
regulation. It was dumb regulation by the government that was 
incentivizing and cajoling and mandating financial institutions to loan 
money to people to buy homes that they couldn't afford to keep.

                              {time}  2000

  What a tragedy. What a tragedy to put somebody in a home they can't 
afford to keep. That is the cause. Fannie and Freddie at the epicenter, 
and the Dodd-Frank bill was totally silent on the issue--totally silent 
on the issue--and people suffered. People suffered.
  I still remember my friends on the other side of the aisle said let's 
roll the dice a little on this affordable housing goal of Fannie and 
Freddie. Well, the dice got rolled, and the American people lost, and 
we had the great American financial crisis. Now they are doubling down. 
Even more regulatory burden dragging down our financial institutions, 
making us less stable, taking away our freedom and prosperity. That is 
just wrong. That is why we have to commit ourselves: No more. It is 
time that we have to replace this law. Five years later, it is obvious.
  I yield to the gentleman from North Carolina (Mr. Pittenger) to hear 
his views on Dodd-Frank as well.
  Mr. PITTENGER. Mr. Chairman, thank you for your leadership on behalf 
of the American people to bring opportunity to them.
  Mr. Speaker, I rise today on the fifth anniversary of the burdensome 
and overreaching Dodd-Frank Act. As I have built two businesses from 
scratch, I understand the risks and sacrifice and the hard work 
necessary to grow a business and create jobs.
  Unfortunately, Dodd-Frank has made it incredibly difficult for 
American small businesses to raise capital, and for the first time in 
35 years, small business deaths have outnumbered small business births. 
Dodd-Frank was supposed to protect the American people. Instead, it is 
hurting the economy and it is costing jobs, particularly low- and 
moderate-income families. Dodd-Frank is strangling the economy and job 
growth by creating a compliance nightmare of over 400 new rules and 
regulations.
  I am not antiregulation, but the pendulum has swung too far. 
Unfortunately, Dodd-Frank goes overboard, fixing problems that don't 
exist and ignoring the root cause of the financial crisis, which was 
the government requirement for easy credit for those who were a credit 
risk.
  We have all been told that Dodd-Frank ends too big to fail. This act 
did not end too big to fail. It glorified it into law and made middle-
income paychecks almost $12,000 less compared to the average postwar 
economic recovery. Five years later, our economy continues to sputter 
at a 2 percent growth rate while Washington bureaucrats continue to 
burden American businesses, those small enterprises, with never-ending 
regulations.
  Dodd-Frank is deterring the entrepreneurship that has made this 
country great. Dodd-Frank is too big, and it has failed the American 
people.
  Mr. HENSARLING. I thank the gentleman from North Carolina for his 
comments tonight. I thank him for his leadership on our committee, not 
only on dealing with Dodd-Frank, but dealing with the very serious 
issue of terrorist financing, where he serves as the vice chair of our 
task force on that subject.
  Mr. Speaker, I yield to the gentleman from Minnesota (Mr. Emmer), the 
newest member of the House Committee on Financial Services. Although he 
is new to the committee, it didn't take him too long to figure out, by 
speaking to his constituents and speaking to his credit unions and 
community banks, that Dodd-Frank is not working, that Dodd-Frank is 
helping make this economy less stable and making the American people 
less prosperous and less free.
  Mr. EMMER of Minnesota. Mr. Speaker, 5 years ago the President signed 
the Dodd-Frank legislation into law. The American people were told that 
Dodd-Frank would end Washington bailouts, protect consumers, and in the 
event of another perilous economic situation, it would mitigate the 
impact and stabilize the financial industry and our economy.
  As American families and businesses have now learned, Dodd-Frank does 
just the opposite. Dodd-Frank has actually codified the too big to fail 
mentality in Washington, harmed consumers, and will fail to sound the 
alarm before the next economic crisis.
  I have talked with many people in the financial services industry 
about Dodd-Frank, and the theme I hear over and over again is that the 
regulatory burdens created by this law are harming their ability to 
offer affordable services to their clients, my constituents.
  Since Dodd-Frank, approximately 1,500 community banks across the 
country have closed, and a recent study shows that Dodd-Frank has added 
61 million hours of paperwork and more than $24 billion in final rule 
costs to the financial industry. These costs are not borne by Wall 
Street executives but, rather, by working mothers, small-business 
owners, and retirees.
  This body is not powerless. In fact, I am here with many of my 
colleagues tonight standing up for working families impacted by this 
flawed law. We should subject this Consumer Financial Protection Bureau 
and Financial Stability Oversight Council to congressional 
appropriations. We should establish a bipartisan commission to lead the 
CFPB and reduce regulation that is crippling our community banks and 
credit unions. By enacting commonsense reforms, businesses can grow, 
jobs will be created, and American workers can better provide for their 
families.
  I also want to thank the 146 banks, 8 credit unions, and nearly 
60,000 constituents in my district who provide vital financial services 
to Minnesotans despite the ever-growing regulatory burden from 
Washington.
  Mr. HENSARLING. The gentleman is obviously a quick study, but it 
doesn't take long when you speak to your constituents to realize, 
again, they are still hurting in this limping economy.
  When one looks at the President's economic program, it is really 
based on a couple major pillars. It is based on his healthcare program, 
ObamaCare, but it is also based on Dodd-Frank; and in many ways Dodd-
Frank is to household finances what ObamaCare is to household health 
care, and it is harming low-income and working American families. It is 
hurting their ability to achieve greater levels of economic 
opportunity, greater levels of financial independence.
  Mr. Speaker, we have an economy that is limping along at about 2 
percent economic growth, when historically we know it has been at 3\1/
2\ percent. The economy is underperforming by 40 percent, and one of 
the reasons is because of Dodd-Frank. You can ask any person who is out 
there--an entrepreneur, small-business person who is

[[Page H5390]]

helping create jobs--and they will tell you about this drag that the 
sheer weight, volume, complexity, and uncertainty of this tsunami of 
regulation is causing.
  I am very happy, Mr. Speaker, that someone that we have on our 
committee is a businessperson who has a history of creating jobs in my 
native State of Texas. I yield to the gentleman from Texas (Mr. 
Williams) to give us his thoughts on Dodd-Frank as well.
  Mr. WILLIAMS. Mr. Chairman, I want to thank you for your leadership.
  Before I begin, I would just like to say, I am a small-business 
owner. I have owned my own business for 44 years. I have been through a 
lot. I have been through dollar gasoline; I have been through 20 
percent interest, where I borrowed money; I have been through the 
slowdown in 1988; I have been through 9/11; and I must tell you, the 
economy that we are in now, Main Street America is hurting like I have 
never seen it hurt before. That is why I am up here to talk about this 
situation that we seem to honor tonight, Dodd-Frank.

  I join the chairman and my other colleagues here tonight to speak on 
what I believe is one of the most impulsive, deceiving, and un-American 
pieces of legislation that has ever been passed through this body. What 
I am talking about is a 2,300-page law that has unfairly blanketed our 
entire financial system with more than 400 costly rules and 
regulations. Just as we have found out that the Affordable Care Act is 
not affordable, we are learning that Dodd-Frank Wall Street Reform and 
Consumer Protection Act doesn't do what its name suggests. I believe we 
probably need a government protection act.
  Now, Dodd-Frank is hammering small town America as we have talked 
about, and I mean like I have never seen before in 44 years. Small town 
America, Main Street America is hurting. They are hurting with 
unnecessary but very expensive compliance measures that are hard to 
meet.
  As a small-business owner, as I have said, of over 40 years, I can 
say firsthand that Dodd-Frank is driving Main Street job creators and 
community banks and credit unions out of business. Yesterday in our op-
ed, Congressman Randy Neugebauer and I wrote that the American people 
were fooled into believing Dodd-Frank was necessary to ensure financial 
stability and prevent future market meltdowns. But instead of 
responsibly studying the root causes of the financial crisis, Democrats 
in Washington rushed to regulate.
  In my home State of Texas, one of the healthiest economies in the 
Nation, 115 banks have closed their doors. These banks are far from the 
major financial institutions in New York. They are small town community 
lenders that cannot pull together resources to comply with Dodd-Frank. 
They are community banks and credit unions that issue 51 percent of all 
business loans under $1 million.
  The crippling effects of Dodd-Frank have trickled down from the 
President's pen to local job creators who had nothing to do with the 
financial crisis. The costs have been passed along to them. It isn't 
right, and it is not fair. Dodd-Frank is another example of how this 
administration discourages growth. Under President Obama and his 
administration, the risk of running a business is no longer worth the 
possible reward, and that is a big problem.
  This is America. Bad policies like Dodd-Frank are the product of 
lawmakers who have little to no business experience. They haven't 
worked on payrolls; they haven't met a payroll; they haven't counted 
inventory; they haven't met with employees that need personal help; 
they haven't put people to work; but they have done something: issue 
153 new regulations, 87 compliance changes, and 59 annual adjustments 
to thresholds.
  At what price, we ask. The Congressional Budget Office and the 
Government Accountability Office have both estimated that Dodd-Frank 
costs $3 billion to implement and will result in nearly $27 billion in 
private sector fees, assessments, and premiums. We simply can't afford 
this.
  For this reason, I have introduced legislation that will loosen Dodd-
Frank's choke hold on small businesses and Main Street America. The 
Community Financial Institution Exemption Act will require the Consumer 
Financial Protection Bureau to explain to Main Street lenders why they 
are not exempted from certain CFPB rules and regulations, as permitted.
  My bill has the support of the Independent Bankers Association of 
Texas, the Texas Credit Union Association, the National Association of 
Federal Credit Unions, and the Credit Union National Association.
  I ask all my colleagues to support my efforts. It is time we stopped 
punishing those who put their livelihoods on the line to realize the 
American Dream and not the American scheme.
  In God we trust.
  Mr. HENSARLING. I thank my friend and my fellow Texan for his 
comments and the perspective that he brings as somebody who has 
actually successfully created jobs in the Lone Star State. He can look 
around at the customers of his business and to his employees and see 
how they have lost their prosperity.
  Mr. Speaker, we were told that when Dodd-Frank was passed that it 
would lift the economy. They had a great celebration and signing 
ceremony at the White House. It would lift the economy.
  Well, so what do we discover 5 years later? What we discover is an 
economy that is limping along at 2 percent. And that is not just some 
vague statistic. That translates into millions of Americans who remain 
underemployed and unemployed in America.
  If you ask the people who create the jobs what is the great 
challenge, one of the great challenges is this regulatory burden. The 
question is not so much regulation or deregulation; the question is 
whether we are going to have smart regulation or dumb regulation. Dumb 
regulation hurts low- and moderate-income Americans who are just trying 
to climb the ladder of success, who are seeking economic opportunity.
  Had we just had the average recovery--the average recovery, Mr. 
Speaker--we would have 12.1 million more jobs in America today. The 
average working family would have an extra $12,000 of income to take 
home in their pocket. That is just if we had the average recovery as 
opposed to this Obama recovery based upon Dodd-Frank as one of its 
pillars. We would have had 1.6 million more who could escape poverty. 
But, no, not the Obama economy. Dodd-Frank and the regulatory tsunami 
are keeping people down.

                              {time}  2015

  We all hear about this. Regrettably, every Member of Congress still 
gets these letters. I had a letter from one of my constituents that 
said:

       There are part-time jobs around my area, but always jobs 
     with no benefits and less than 40 hours. My son is a disabled 
     Iraqi Freedom combat veteran who has lost hope of a decent 
     full-time job.

  That is the kind of angst we hear, but House Republicans are 
committed to helping these people. One of the ways we have to do it is 
do something about Dodd-Frank.
  I am very happy that I am joined by two other of my colleagues 
tonight, the gentleman from Michigan (Mr. Huizenga), who chairs our 
Monetary Policy and Trade Subcommittee, and the gentleman from Arizona 
(Mr. Schweikert), who has a lot of experience with municipal finance in 
Arizona.
  I am happy first to yield to the gentleman from Michigan to get some 
of his perspectives on Dodd-Frank and how we are less stable, less 
prosperous, and less free.
  Mr. HUIZENGA of Michigan. Mr. Chairman, I appreciate your leadership 
on this and so many other issues. I am going to have a couple of 
questions for you in a minute because I, like my colleague and friend 
from Arizona, wasn't here when Dodd-Frank was created. I like to say I 
wasn't here for the creation; I just have to live with the echo effects 
of it. I have to figure out what it means in this post Dodd-Frank 
world.
  By the way, it has been mentioned tonight it was 2,300 pages. It 
sounds a little reminiscent to another bill that maybe they had to pass 
to find out what was in it. I think if it wasn't for ObamaCare--the 
Affordable Care Act--and that famous statement that was uttered about 
having to pass it to find out what is in it, this would be the poster 
child for that.
  This would be the poster child for Federal Government overreach. It 
was

[[Page H5391]]

an agenda waiting for a crisis to come along.
  Mr. HENSARLING. I was here 5 years ago, and it is funny and 
reminiscent that Senator Dodd, the coauthor of Dodd-Frank--the Dodd of 
Dodd-Frank--said at the time: ``No one will know until this is actually 
in place how it works.''
  He said this in 2012. Here we are, 5 years later, and we know how it 
works. We know it is a drag on the economy. We know that free checking 
has been cut in half. We know that bank fees have gone up. We know that 
we are losing a community bank and a credit union a day, mostly because 
of Dodd-Frank.
  Mr. HUIZENGA of Michigan. Mr. Chairman, I have to disagree a little 
bit with you. We know that there is a tremendous amount of Dodd-Frank 
that we have seen play out, but this is something I am not sure 
everybody understands. They are still writing the rules; 5 years into 
it, we are still writing the rules. I don't think that was your intent 
at the time this was passed.
  Mr. HENSARLING. It was never my intent to support the law in the 
first place. Under then-Ranking Member Spencer Bachus of Alabama, my 
predecessor, Republicans had put forward a different law, and it was 
about bankruptcy, as opposed to of bailouts. Instead, what Dodd-Frank 
did was codify bailouts into law.
  It codified this whole concept of too-big-to-fail institutions. I 
believe there is not one financial institution in America that is too 
big to fail. The American financial system is too big to fail, but not 
one particular financial institution.
  We offered a different law in the first place, which was totally 
ignored by the Democrats. At the time, they enjoyed a super majority; 
so we were left with this particular monstrosity that, again, is making 
the American people less prosperous.
  I thank the gentleman, and maybe we can get a comment from the 
gentleman from Arizona.
  Mr. SCHWEIKERT. One of the most painful things, Mr. Chairman, when I 
first got elected, I was blessed to be on the Financial Services 
Committee, and I spent that summer trying to read every word of the 
Dodd-Frank legislation.
  What you learn is, even reading the legislation, you don't understand 
all it is going to do because it refers to this agency will make this 
rule set, this regulator will create this rule set--you start to 
realize that 2,300 pages is taller than I am--and it is still coming.
  Mr. Chairman, what percentage of the rule set is finished so far?
  Mr. HENSARLING. A little over 60 percent, 5 years later; but in some 
respects, nothing is finalized because, when we think about being less 
free, in many respects, Dodd-Frank isn't even a law. Dodd-Frank is a 
license to unelected, unaccountable Federal bureaucrats to create 
discretionary results that they can change at their discretion.
  Even the rules that are ``finalized,'' which is kind of a Washington 
term, you still don't have something that is predictable, that you can 
count on, and so it has led to all of these abuses.
  When you think about the people who have run our VA, the people who 
did the rollout for ObamaCare--a healthcare system that people didn't 
want, they couldn't afford, and on a Web site that didn't work--all of 
a sudden, we are entrusting them to decide whether or not we can get a 
credit card, whether or not we can get a mortgage.
  In that respect, no rule is particularly finalized.
  Mr. SCHWEIKERT. I know Chairman Huizenga has actually taken a look at 
some of these things.
  One of the other aspects that almost never gets discussed is that 
innovation is almost gone, the opportunity for what the next world is 
going to look like.
  Think of this, when Apple Pay comes from a technology company and not 
one of our banking companies, you have got to understand what this law 
has done. It has basically stifled economic growth, but it has also 
stifled the very innovation that made our financial markets one of our 
engines of growth.
  Mr. HENSARLING. I yield to the gentleman from Michigan.
  Mr. HUIZENGA of Michigan. I want to relay a little experience I had 
just today. I was speaking in front of a group of European Parliament 
members, a few European business folks; and this question was brought 
up about trying to harmonize our financial services laws and trying to 
make sure that we are all kind of on the same page.
  One of the members from a very liberal leftwing party was asking 
about Dodd-Frank and whether that is a path that they should pursue, 
and even she was dubious about that. Certainly, some of the other 
members from the European Parliament were seeing that this is a 
cautionary tale.
  They know that they have been down a tough spot in Europe because 
they have seen such a lack of growth and innovation, and they are 
seeing that same thing happen here in the United States.
  Mr. HENSARLING. I yield to the gentleman from Arizona.
  Mr. SCHWEIKERT. Let's face it. There is a wonderful irony here. The 
system has great stress; horrible things happened. Let's turn to the 
very regulators who were in charge at that time and say: Let's double 
down with them.

  Instead of taking a step backwards and understanding we live in the 
time of information and technology, where we could have used that 
sunshine to see into our markets, instead, we basically created a 
command and control regulatory system and handed it back to the same 
folks who screwed it up in the first place.
  Mr. HUIZENGA of Michigan. Will the gentleman yield?
  Mr. HENSARLING. I yield to the gentleman from Michigan.
  Mr. HUIZENGA of Michigan. Certainly, the gentleman from Arizona is 
not implying that they are not well intended.
  Mr. HENSARLING. I yield to the gentleman from Arizona.
  Mr. SCHWEIKERT. Well, think about this: How much reform has truly 
happened at Fannie and Freddie? Where are we at right now? I know the 
apologists on the left go out of their way to say don't blame the GSEs 
and their concentration risk and the cascade and the markets they built 
in subprime paper and don't blame the regulators who are supposed to be 
watching them.
  Here we are, 5 years later, and in many ways, the folks who soaked 
themselves in gasoline are still there.
  Mr. HUIZENGA of Michigan. It seems to me that part of our problem 
here is not intentions, but it is ability to execute. What we have done 
is we have replaced the private sector. We have replaced the 
innovators, the people that are getting stuff done in our economy.
  We have replaced them with unelected bureaucrats who don't often know 
what the real world is like and how it operates. I think that has 
caused so many problems.
  Mr. HENSARLING. It is a very important point because America has 
always been the land of the risk taker, the hard worker, the big 
dreamer, the entrepreneur. Now, what we are seeing in America today, 
because of Dodd-Frank and the Obama regulatory tsunami, is that we are 
having new business startups at their lowest level in over a 
generation. That means, increasingly, our garages are full of old cars, 
as opposed to new startups.
  Economic growth is something that compounds. If you don't have 
economic growth and American families can't grow, again, they lose 
sleep at night worrying about how they are going to pay their bills, 
how they are going to cover their checks, what will their children's 
future be?
  That is for those who still have checking accounts because another 
result of Dodd-Frank is that bank fees have gone up. As bank fees have 
gone up, the unbanked, lower- and moderate-income Americans, those 
ranks have grown. According to the FDIC, 9 million households don't 
have a checking or savings account; and that is because account fees 
are too high or unpredictable, most of this courtesy of Dodd-Frank.
  Another way it hurts hard-working American families is this 
Orwellian-named Consumer Financial Protection Bureau, where there is 
now one national credit nanny, has come up with a rule called the 
qualified mortgage rule that the Federal Reserve says, once fully 
phased in, one-third of Black and Hispanic borrowers will find 
themselves disqualified for not meeting Washington's rigid one-size-
fits-all debt-to-income requirements.

[[Page H5392]]

  We are losing our entrepreneurs. We are losing our small businesses. 
Low- and moderate-income people are falling behind because Dodd-Frank 
didn't keep the promise of lifting the economy.
  Mr. HUIZENGA of Michigan. If the chairman will yield, I have got a 
question for you--because I have had an experience in my time. This is 
my third term here in Congress, and I have had a little bit of an 
experience that was bothersome to me. I want to know if this matches 
your expectations as well.
  You talked about this qualified mortgage. I have a piece of 
legislation called the Mortgage Choice Act, where rules that were 
written under the Dodd-Frank Act in an attempt to protect people from 
being gouged, I believe is actually doing the opposite.
  In fact, it is not just me. It was a bipartisan group that got 
together and put this piece of legislation together that last Congress 
passed this House in this Chamber unanimously.
  For the American people watching out there, yes, things actually pass 
unanimously here. You are not going to hear about that in the news a 
whole lot, but we actually can work together.
  Now, there is one disturbing thing, though. It passed the House 
unanimously, went over to the Senate, and there was one particular 
Senator who put the brakes on it. Not to name any names, but she didn't 
want any changes to her baby, the Dodd-Frank Act.
  We had to reintroduce the bill. As the chairman wells knows, we got 
it into committee again. Suddenly, it went from being unanimous to 
being a divisive issue. That was certainly not anything on our part 
because it was the exact same language, but people who had decided a 
year ago this was the exact way to go have decided, for political 
purposes, that it is now something that can't be touched, can't be 
altered, can't even be addressed, and I am sure the chairman has some 
thoughts as to whether that is working.
  Mr. HENSARLING. I thank the gentleman for his, regrettably, accurate 
observation.
  I try not to question the motives of my colleagues, but something is 
awry when something goes through the House unanimously, and then just 
in a matter of a weeks to a couple of months later, all of a sudden, it 
becomes a very divisive issue.
  My fear is that the left hand doesn't always know what the far left 
hand is doing. The far left hand has decided that Dodd-Frank is sacred 
text, notwithstanding the fact that, 5 years later, we understand that 
free checking has been cut in half; 5 years later, we understand that 
bank fees are going up; 5 years later, we understand the ranks of the 
unbanked and the low- and moderate-income people who need to be able to 
have access to credit--when you need $500 to repair your car to get to 
work on Monday, you need $500 to repair your car to go to work on 
Monday.
  Yet, for many, it is clear that Dodd-Frank has become a matter of 
brand protection, of ideology; and it really doesn't matter how many 
people suffer. That is so sad. I have strong thoughts on the matter, 
but I will sit down and reason in good faith and compromise policy in 
order to advance principles on behalf of the American people.
  I yield to the gentleman from Michigan.
  Mr. HUIZENGA of Michigan. Mr. Chairman, you just hit on the word 
``compromise.'' I think there are many of us that are looking to 
compromise.
  I was disturbed--and I am curious to hear the thoughts of my 
colleague from Arizona as well about this--when we were sitting in 
committee and had a witness in front of us who characterized the Dodd-
Frank Act as a compromise bill, it struck me that I guess maybe he is 
right. It was a compromise between Senator Dodd and Congressman Frank 
at the time, both Democrats, who didn't bother to get any input from 
the Republicans.
  As you pointed out, Mr. Chairman, you actually had a bill. A 
compromise would have been to take parts of your bill and parts of 
their bills and marry them together. This isn't what happened, though, 
is it?

                              {time}  2030

  Mr. HENSARLING. I thank the gentleman. Again, Republicans were frozen 
out. It was what Democrats wanted to do so they can own this particular 
bill that, again, is making America less stable. It makes it less 
stable because the big banks are bigger and the small banks are fewer.
  Dodd-Frank has concentrated more financial assets in fewer 
institutions. It is a pillar of the President's economic program that 
is causing working families to have stagnant paychecks and lower bank 
accounts, that is, assuming they have a bank account, because the ranks 
of the unbanked has increased. It has made us less free.
  We have one national consumer credit czar who decides now. It is 
Washington. Washington decides whether or not you can have a credit 
card. Washington decides whether or not you can have a mortgage. 
Washington now decides whether or not you can get a small business line 
of credit.
  I haven't even talked about this thing called the Financial Stability 
Oversight Council that, for all intents and purposes, now has the 
ability to control huge swaths of our economy by defining vague terms 
and systemic risks.
  Mr. SCHWEIKERT. Will the gentleman yield?
  Mr. HENSARLING. I yield to the gentleman from Arizona.
  Mr. SCHWEIKERT. Thank you for the yield, Mr. Chairman.
  You actually just hit on one of the wonderful ironies and one of the 
great difficulties we have in our discussions in our own committee.
  First off, the regulation, the way Dodd-Frank is designed, it is 
designed for the last problem. It is not forward-looking of what the 
future looks like. And then there is always the arrogance here in 
Washington of thinking we know what the future looks like.
  But there is also a number of professionals in the industry and 
academia who are now writing about what they call concentration risks. 
What happens when you tell every bank that they can only hold certain 
assets? You now have a concentration risk. If something goes wrong in 
that asset category, the cascade effect is universal. This is now 
happening up and down our financial system.
  In many ways, I can make you a powerful argument that the post-Dodd-
Frank world is creating a banking system that ultimately is more 
fragile because of a contagion concentration risk.
  Mr. HENSARLING. It is, in some respects, deja vu all over again. It 
is dangerous for government to have one view of risk--one view of risk. 
The regulators told all the banks that there was virtually no risk in 
mortgage-backed securities, no risk in sovereign debt, so you don't 
have to reserve practically any capital against those.
  Think Fannie, Freddie, and Greek bonds, and it almost brought down 
the entire national financial system, and we are obviously repeating 
the same mistake. So I appreciate the gentleman from Arizona for his 
observation.
  Mr. HUIZENGA of Michigan. Will the gentleman yield?
  Mr. HENSARLING. I yield to the gentleman from Michigan.
  Mr. HUIZENGA of Michigan. I know we have probably got about 3 or 4 
minutes before a quick hour has gone by here, but I go back to my 
intention here and the question I have got for the chairman.
  Obviously, a lot of well-intentioned things. Were there some issues 
and problems, abuses? Absolutely. I was in the real estate industry 
myself, still am in construction. But the goal of having Dodd-Frank 
lift our economy, promote financial stability, end too big to fail, it 
certainly doesn't seem like that from the perspective that I am. And I 
think all the evidence is overwhelmingly that the answer is a 
resounding ``no'' on all counts.
  I would love to hear the chairman's thoughts on that evidence.
  Mr. HENSARLING. Well, before I do, Mr. Speaker, may I inquire how 
much time is remaining?
  The SPEAKER pro tempore (Mr. Bost). The gentleman has 3 minutes 
remaining.
  Mr. HENSARLING. Again, in many respects, I do believe the economy is 
more fragile. The good news is that more of our financial institutions 
are holding more capital. They are more liquid.
  But what is ironic is the regulators, prior to Dodd-Frank, had all 
the regulatory authority they needed to have made these balance sheets 
even safer; yet there has been no effort on the part

[[Page H5393]]

of the administration, notwithstanding the good work of our committee, 
to do anything about Fannie and Freddie that were at the epicenter of 
the crisis.
  Again, this whole government idea of putting people into homes that 
ultimately they cannot afford to keep, it is terrible for them. It is 
bad for the taxpayer. It is bad for the economy. We have to move to a 
sustainable housing system: sustainable for homeowners, sustainable for 
the economy, and certainly sustainable for taxpayers.
  Mr. HUIZENGA of Michigan. Will the gentleman yield?
  Mr. HENSARLING. I yield to the gentleman from Michigan.
  Mr. HUIZENGA of Michigan. I used to be a licensed Realtor, and I will 
never forget that time in the late nineties when I went to my first 
closing, where they slid a check, the closing agent slid a check across 
to the seller, as is expected. They are selling their home. Then they 
slid a check across to the buyer, and there was kind of a nervous laugh 
and a joke. ``Well, we know you are probably going need to buy some 
furniture.'' That was the first time I personally witnessed someone 
borrowing more than what the house was actually worth. It is those 
kinds of decisions and that lack of risk, that lack of accountability, 
I think, that brought us to some of the areas.
  I just wanted to relay that story of something that was just seared 
into my mind, and one I hope we never, ever repeat.
  Mr. HENSARLING. I fear that, in many respects, the Obama 
administration is making the same mistakes, and that is why, again, we 
need the sustainable housing financial system.
  But ultimately, what we are working for, as House Republicans, is to 
make sure that all Americans have greater economic opportunity, and 
that means competitive, innovative, and transparent financial markets. 
That means an economy that is fair and works for everyone. It means 
getting out of the bailout business once and for all. There ought to be 
bankruptcy for these financial institutions, not taxpayer bailouts.
  We need all Americans to be able to climb the ladder of success, and 
that means they need access to bank accounts. They need to go back and 
have access to the free checking which they have lost under Dodd-Frank. 
We need community banks to prosper for our rural areas, for our inner 
cities.
  All of that can happen yet again, but it all starts--it all starts--
with having to replace Dodd-Frank, which is a clearly failed law 5 
years later. It didn't meet its promises. We are less stable, we are 
less prosperous, and we are less free.
  House Republicans are putting forth a different plan today, just as 
we did 5 years ago. The evidence is stark. The evidence is stark that 
the big banks are bigger, the small banks are fewer, and hard-working 
Americans are worse off.
  I appreciate the time we have had with our colleagues. It is time to 
replace Dodd-Frank.
  Mr. Speaker, I yield back the balance of my time.

                          ____________________