U.S. Representative

Dennis A. Ross

Proudly Serving Florida's 15th Congressional District

Ross Opinion Pieces


Dodd-Frank: Another Empty Promise

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Washington, July 21, 2015 | Joni Shockey (202-503-8755) | comments

This week marks the fifth anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). This 2,300-page law has imposed more than 400 new government mandates, creating a sluggish economic recovery and uncertainty across our financial markets.

Dodd-Frank established vast new government bureaucracies, like the Consumer Financial Protection Bureau (CFPB) and the Financial Stability Oversight Council (FSOC), that operate largely out of the public eye. Not only do these bureaucracies rarely answer to the checks and balances imposed on other government agencies, but their financial regulations have the potential to grossly alter the U.S.’s economy and affect the livelihoods of millions of Americans. 

Contrary to the Obama Administration’s claim that unregulated financial institutions and Wall Street caused the financial crisis in the U.S., regulations applied to the financial services sector actually increased every year for 10 years leading up to the collapse.

The president promised Dodd-Frank would “lift the economy,” but once again, he gave the American people false hope. After new federal mortgage rules are fully implemented, 40 percent of borrowers today may not qualify. In fact, it is now harder for low- and moderate-income Americans and minorities to buy a home. Additionally, 16.7 million Americans remain unemployed or underemployed, the number of small business “deaths” is exceeding the number of small business “births,” and the labor force participation rate is only 62.6 percent.

There are now fewer local banks and credit unions serving the needs of small businesses and families in our communities than before Dodd-Frank was signed into law. These community banks and credit unions did not cause the financial crisis, but they are suffering under the weight of Dodd-Frank’s compliance costs, which are eventually paid by consumers.

Dodd-Frank’s overcomplicated laws created such an extensive grip on the financial market that even local farmers and citrus growers were being unnecessarily regulated. Before Congress was finally able to step in and eliminate some of that regulation, certain Dodd-Frank investment requirements detrimentally forced farmers and citrus growers across Florida and the U.S. to endure higher costs in managing their risk and producing their products. These burdensome costs were then, unfortunately, passed on to hardworking Americans trying to feed their families. This type of out-of-control regulating sounds all too familiar.

During the past 5 years, Dodd-Frank has proven to be the financial equivalent of Obamacare by impairing competitiveness, controlling individual choices, adding unnecessary layers of bureaucracy, and harming intended beneficiaries. This law is just one of the many strangleholds in the Obama Administration’s economic strategy that has caused the U.S. to have the slowest and weakest economic recovery since the Great Depression.

Furthermore, Dodd-Frank has granted FSOC vast powers to designate insurance companies and asset management firms as systemically important financial institutions (SIFIs), even though they pose no identifiable systematic risk to our economy. SIFI designations greatly harm investors by subjecting these companies and firms to unwarranted regulations. SIFI designations are also nothing but government bailouts in disguise, with SIFI-designated firms receiving government handholding during their financial distress.

My colleagues and I have a duty to protect ambitious citizens and entrepreneurs from a micromanaging government that stifles innovation and self-reliance, so that Americans may thrive. Unfortunately, proponents of Dodd-Frank do not believe in the American people’s ability to succeed without overreaching regulations by federal bureaucrats.

America needs a stable economy that creates jobs, not one that bulldozes over freedom. Dodd-Frank’s implementation has been a mess, but as a Member of the Financial Services Committee, I will continue to put consumers first as I work with my colleagues to create opportunities for economic growth and prosperity in our communities.

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