GOP Proposes Dodd-Frank Alternative

Subject:  Changing Regulatory Tide

Summary Analysis: 

Ahead of scheduled remarks today at the Economic Club of New York, Representative Jeb Hensarling (R – TX), Chairman of the House Financial Services Committee, announced plans to propose an alternative framework for financial regulation. The new Republican-backed framework would supersede the rules set in place by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) six years ago.  In his address, Hensarling called Dodd-Frank “bad policy and worse economics” and a “grave mistake.”

He took aim at the expansive authority granted to the Consumer Financial Protection Bureau (CFPB) and Financial Stability Oversight Council (FSOC) in the legislation. He argued that the Dodd-Frank Act “codified into law Too Big to Fail and taxpayer-funded bailouts.” In lieu of Dodd-Frank Act rules, Hensarling supports the Financial CHOICE Act, which among other things, allows banks meeting a 10 percent leverage ration to opt out of many of the existing requirements.  He called the provisions a “market-based, equity financed Dodd-Frank off-ramp.”


Hensarling’s Remarks:


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