A important banking reform bill may be headed to the House floor in the coming weeks. House Financial Services Committee Chairman Jeb Hensarling, R-Texas, sponsored the Financial CHOICE Act, which would roll back some of the biggest regulatory burdens of the 2010 Dodd-Frank law, bringing meaningful relief for consumers and small businesses.
Left out of the CHOICE (Creating Hope and Opportunity for Investors, Consumer and Entrepreneurs) Act, though, is a provision that would have eliminated a cap on debit card swipe fees, the so-called Durbin Amendment. Its namesake reasoned that capping the amount that banks charge retailers for debit card purchases would result in consumer savings, but history has proven otherwise. The policy has resulted in higher bank fees and costs and restricted access to free checking accounts.
Members of Congress should support the CHOICE Act, even if it excludes language repealing the Durbin Amendment. The bill includes too many other positive reforms to pass up.
Significant are the changes to the unconstitutional Consumer Financial Protection Bureau, an independent agency created in Dodd-Frank that regulates financial institutions with little accountability and little oversight by Congress. The bill would allow the president to remove the director more easily. It also changes its funding structure — instead of receiving its funds through the Federal Reserve’s operating expenses, the bill would subject the agency to the congressional appropriations process.
Other highlights in the bill include: eliminating the independent Office of Financial Research and its broad powers; repealing certain mandates such as the Volcker Rule, which has restricted liquidity; stopping the ability of the Exchange Stabilization Fund to bail out a financial firm or its creditors using taxpayer dollars; and ending the misguided practice of “too big to fail.”
Given these myriad important reforms, this legislation finds strong support among conservative groups. Americans for Prosperity led a coalition of more than 20 conservative organizations representing millions of people in sending a letter in support of the CHOICE Act.
Repealing and replacing the failed policies established in the Dodd-Frank Act will mean that families and financial institutions will have greater access to capital, which will lead to greater job growth, personal wealth, and overall economic prosperity. Lawmakers should support this important legislation when it when it comes to the floor.
Christine Harbin (@ChrissyHarbin) is a contributor to the Washington Examiner’s Beltway Confidential blog. She is vice president of external affairs for Americans for Prosperity.
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