Congressman Roger Williams

Representing the 25th District of Texas

The CHOICE Act is a Better Way

Sep 14, 2016

In 2010, just two years after one of the largest financial collapses in our nation’s history, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law. At the time, President Obama and Congress promised to hold Wall Street accountable and protect American families from unfair, abusive financial practices.  

But six years later, we have seen firsthand that Dodd-Frank, as it is called for short, has allowed for continued taxpayer-funded bailouts and crippled Main Street businesses and community financial institutions.

My friends who disagree with me will argue that the lack of regulation led to the financial collapse of our economy in 2008. What they won’t tell you is that today’s cost of overregulation has made it near impossible to start and maintain a small business. As of today, the number of finalized regulations under Dodd-Frank has cost more than $45 billion dollars, with billions of dollars estimated in rules that are still pending.

These costs are inherited by businesses who must hire more accountants and lawyers to meet compliance measures. For small businesses, which employ half of the nation’s workforce, this is devastating because they oftentimes have to cut elsewhere in order to gather the resources to meet standards.

But overregulation doesn’t stop with mom and pop shops. Let me tell you about community banks just in our home state.  

In 2010 there were 626 FDIC-insured banking institutions in Texas. The most current number of chartered banks and savings institutions in the Lone Star State is 472. That is too significant of a decline for a state with one of the healthiest economies in the country.  

The Dodd-Frank Act created the Consumer Financial Protection Bureau, otherwise known as the CFPB.  

As many of my colleagues have said in the past, the CFPB has an important mission to carry out. Properly designed, it would be capable of accomplishing a great deal. But sadly, that is where this fairytale ends. The CFPB, like all government agencies, must operate with transparency and be held accountable to taxpayers. Unfortunately, that’s not how the CFPB was set up.

The CFPB is headed by one director, and appointed by the president for one five-year term. The bureau can spend hundreds of millions of dollars each year with no oversight or control from Congress. Its budget is not subject to congressional appropriations.

The CFPB’s jurisdiction is so vast that it often creates or implements rules over industries it was never intended to regulate.

Even when given the chance to exempt smaller financial institutions from their rules as stipulated in the Dodd-Frank Act, the CFPB has largely ignored congressional intent. It is time to restore the decision making power to the lawmakers who are held accountable to the people who sent them to Washington.  

So this year I introduced the CFPB Accountability Act of 2016. This bill, which I’m glad to see was included in the CHOICE Act, and was voted out of committee on Tuesday, would require congressional authorization for any CFPB ruling that would have an economic impact of $100 million or greater.

We must relieve small businesses of unnecessary and expensive measures, protect taxpayer dollars and make the CFPB more transparent and accountable. The CHOICE Act will do this. It will strengthen our financial regulatory system and, ultimately, the American economy. And that is why it is a better way.

Congressman Roger Williams (R – Austin) is a member of the House Financial Services Committee, and he has more than 40 years’ experience in small business.