The chairman of the House Financial Services Committee told CNBC on Tuesday the 2010 Dodd-Frank Act has stifled economic growth and institutionalized "too big to fail" banks. That's why Rep. Jeb Hensarling said he is seeking to wipe out or remake large parts of the Democrats' signature financial industry regulatory achievement.
Hensarling, R-Texas, made his comments ahead of an appearance at the Economic Club of New York, where he plans to outline legislation that would undo key parts of Dodd-Frank and overhaul and rename the Consumer Financial Protection Bureau.
The Financial Choice Act would repeal the Volcker Rule, which bans banks from making speculative bets with their own accounts, according to details of the plan released before Hensarling's speech. It would remove the Financial Stability Oversight Council's authority to deem financial institutions systemically important and give banks the option of holding high levels of capital instead of complying with liquidity standards enshrined in Dodd-Frank and Basel III.
"We believe that we need a banking system that has a federal safety net that has a whole lot more capital and a whole lot less federal control," Hensarling told CNBC's "Squawk Box."
Under Hensarling's legislation, the CFPB would become the Consumer Financial Opportunity Commission, replace the single director with a five-member bipartisan commission, and be tasked with a dual mandate to protect consumers and competitive markets.
Extending the commission's mandate is necessary because "part of consumer protection is protecting the economic choices and vibrant competitive markets," Hensarling said.