For seven years now, the Dodd-Frank Act has stifled the American Dream — for half of the country.
Let me explain.
After the 2008 financial crisis, the economy was in dire straits. Washington responded with the Dodd-Frank Act, a sweeping overhaul of the American financial regulatory system, implementing the strongest regulations seen since FDR's New Deal.
Since 2008, some of America's large firms and large metropolitan cities have experienced positive post-recession recovery. Today's rising stock market figures indicate that our economy is prosperous and gaining strength with each day. It appears as though this is a time of growth for businesses, and this is true for the portion of Americans who have already established their financial independence.
You aren't hearing the story of the other half of America.
"In deeming a select group of banks 'too big to fail,' Washington saved Wall Street from collapse, but as a result, unelected bureaucrats and overregulation handcuffed community banks, regional banks, credit unions and other lenders."
Our smaller communities and hopeful entrepreneurs have been shut out. Those who are seeking to start or grow their small business are incapable of accessing the capital necessary to merely plant both feet on the ground. Favorable stock market figures aren't translating to the average American's paycheck.
The celebrated American Dream of starting a business and attaining true financial independence is not achievable for these individuals because President Obama and Dodd-Frank's America put big cities and big banks first.
The poorly-constructed, 2,000-page Dodd-Frank Act has ballooned to 25,000 pages of rules and regulations. It appears Washington forgot that real people rely on banks to access the capital they need to finance their businesses, educations and homes.
In deeming a select group of banks "too big to fail," Washington saved Wall Street from collapse, but as a result, unelected bureaucrats and overregulation handcuffed community banks, regional banks, credit unions and other lenders.
These smaller financial institutions have their hands tied with onerous regulations and high compliance costs, and their ability to loan money is constrained.
To provide the relief these Americans need, Congress must roll back some of the heavy-handed Dodd-Frank provisions.
That is the only way to fuel our economic engine in West Tennessee and across the country.
In 2010, I joined the board of BankTennessee, a community bank in West Tennessee. It is no secret that this was an unfavorable time to join a bank board, as it was just two years after the financial crisis. The economy was stagnant, and banks across the country were struggling to resume routine business.
Joining the board of BankTennessee in 2010, the year of Dodd-Frank's fruition, afforded me a unique vantage point to observe six years of the palpable damage the law inflicted on America's small businesses and financial institutions.
After seeing the obstacles BankTennessee and banks across the nation faced following the crisis, I know how important it is to roll back Dodd-Frank so, once again, individuals can access capital.
This was one of the reasons I decided to run for Congress.
After being elected to the House of Representatives, I set my sights on becoming a member of the financial-services committee –a committee enthusiastic about the economic opportunities that lie on the other side of regulatory reform.
Rural communities and our working class — made up of some of the most patriotic and dedicated people in America — have not had the luxury of Washington's protection.
A majority of Americans cited the economy as their number one concern in the voting booth last November. President Donald J. Trump was elected because he recognized that half of America has been left behind in this two-speed economy.
Now, as a member of the financial-services committee, I am working with Chairman Jeb Hensarling and my colleagues on the committee to change the current system.
In our first full committee hearing this February, Federal Reserve Chair Janet Yellen delivered her semiannual monetary policy report to Congress. A couple things stood out to me in her remarks. Chair Yellen said that our nation is at full employment and that, while there is still room for improvement, wages are rising.
Chair Yellen should take a drive through West Tennessee. She would see how that may be true for the half of America that benefitted from Dodd-Frank. Unfortunately, Chair Yellen's evaluation was not considering a dynamic economy — an economy that encourages new businesses, new job creation and new salaries.
In 2014, the number of small businesses added to the economy was 650,000 firms short of the average. That translates to a loss of roughly 6.5 million jobs.
By implementing one-size-fits-all regulations, Washington bureaucrats have made lending nearly impossible for smaller banks, shutting down their ability to empower dependable clients who would reinvest in their communities.
With nowhere else to turn, entrepreneurs and small businesses who do not qualify for bank loans turn to credit cards and home-equity lines of credit, but Dodd-Frank has shut down these avenues, with credit-card issuance at a record low of 50 million fewer accounts than before the recession.
The American people should be in charge of their own economic opportunity, not bureaucrats in Washington.
Now, Congress and the Trump administration have an opportunity to roll back the regulations causing this dichotomy in the American economy.
The financial-services committee has already hit the ground running on legislation that will dismantle Dodd-Frank and open the door for all Americans to achieve financial independence. I am encouraged by the ambitious and productive schedule Chairman Hensarling has mapped out.
Our committee is working to grow the American economy and help put more people back to work with full-time, good-paying jobs.
Dodd-Frank created two Americas, but I see a unified U.S. economy that serves all Americans.
Commentary by Rep. David Kustoff (R-TN), who represents Tennessee's 8th District, which includes 13 counties and portions of Shelby and Benton Counties. Kustoff also serves as a member of the House financial-services committee. Follow him on Twitter @repdavidkustoff.
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