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Dodd-Frank has failed. Here's why our plan is better

Bankers at an ATM
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The Dodd-Frank Act, signed into law in 2010, was sold to the American people as the solution to our economic woes and the financial crisis that left so many Americans financially insecure. The 2,300 page bill was codified based on the premise that it would promote financial stablity, end too big to fail, and lift our nation's economy.

Nearly six years since its enactment, we should look around and ask ourselves if any of Dodd-Frank's promises have come to fruition. Is our economy more stable? Are taxpayers no longer on the hook for bailouts? And are Americans better off today than they were six years ago? The answer is a resolute no.

Fees for checking accounts have gone up, the personal savings rate has declined and the regulatory burdens stemming from Dodd-Frank are having devastating consequences on local financial institutions. Community banks and credit unions, which serve as the lifeblood of many Missouri towns, find themselves faced with regulations designed for the world's largest, most complex financial institutions.

Many of these are the only financial institutions serving their respective communities, and if the current trend continues, many of them will have to merge with bigger banks in order to spread out the compliance costs or close up shop altogether.


Many of these are the only financial institutions serving their respective communities, and if the current trend continues, many of them will have to merge with bigger banks in order to spread out the compliance costs or close up shop altogether.

Why does any of this matter? Because it makes it more difficult and more expensive for Missourians to get car loans, home loans, and small business loans, putting the American dream further out of reach for many American families.

It is crystal clear that we need a change. After years of holding hearings in the Financial Services Committee with key stakeholders and consumers, Committee Chairman Jeb Hensarling recently introduced key elements of a Republican plan to reform and replace Dodd-Frank.

This plan, the Financial CHOICE Act, offers a new model for financial opportunity. It strives to provide every American with the chance to achieve financial independence, and to ensure consumers are protected from fraud and deception. The CHOICE Act also finally brings to an end the possibility of taxpayer bailouts of financial institutions, affirming that no company should hold the status of being "too big to fail."

The legislation goes a step beyond Dodd-Frank and increases penalites for fraud committed by finanical institutions, promoting not only consumer protection but also enhanced transparency and accountability.

Also included are common sense pieces of legislation that have already passed the House that will offer badly-needed relief for our neighborhood financial institutions. Among them is H.R. 766, my Financial Institution Customer Protection Act, which would bring to an end Operation Choke Point.

Operation Choke Point, designed by the Federal Deposit Insurance Corporation and the Department of Justice under the pretenses of rooting out fraud from the financial system has put the squeeze on legally-operating industries the government doesn't like in an attempt to choke off those industries from our country's banking system.

My colleagues in the House supported this legislation earlier this year and I am incredibly pleased to see it included in this package.

In the coming months, you'll see our Committee work hard to reform and replace Dodd-Frank, and bring to an end the negative impact it has had on consumers and our communities. The mission of the Financial CHOICE Act is not to reward the bad actors Dodd-Frank failed to address, but rather to inject sanity to the financial regulatory system, to restore the access to credit that has evaporated in the last five years, and to provide more Missourians with the opportunity to achieve financial independence.

I look forward to having further discussions with key stakeholders and consumers as we move forward and working with my colleagues in the House so that we can have a better and more stable financial system in our nation.

Commentary by Congressman Blaine Luetkemeyer, the vice chairman of the House Small Business Committee and a member of the House Financial Services Committee, where he serves as the Chairman of the Subcommittee on Housing and Insurance. Follow him on Twitter @RepBlainePress.

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