WASHINGTON—House Financial Services Committee Chairman French Hill (R-AR) Tuesday voiced strong support for rolling back Dodd-Frank regulations, arguing the law’s one-size-fits-all mandates have unfairly burdened smaller financial institutions like credit unions.
In opening remarks at this week’s hearing reviewing the law’s 15-year impact, Hill said Dodd-Frank has diverted resources away from community service and toward regulatory compliance, while empowering unaccountable agencies and stifling capital markets.
"Our colleagues across the aisle often criticize today’s banking system, but rarely do they acknowledge that it is a direct result of the policies they enacted after the 2008 financial crisis along party-lines,” Hill said. “Dodd-Frank was sold to the American people as a sweeping fix to prevent another crisis, yet over time it has become clear that this approach has not delivered as promised for Main Street.”
Instead, Hill asserted, history shows the law punished community financial institutions through its one-size-fits-all mandates, shifted activity outside the banking system, created new and unaccountable agencies like the CFPB, and prioritized duplicative compliance and regulation by enforcement over actual consumer protection.
"These smaller institutions did not cause the crisis, but they have been forced to navigate new compliance burdens and divert resources away from serving their communities and toward satisfying Washington bureaucrats,” Hill stated. "The law created new agencies, like the CFPB, which has operated with unprecedented autonomy and minimal accountability to Congress or the American people.”
Hill pointed out that for 15 years, the financial system has lived under the shadow of Dodd-Frank.
The Law Was a 'Burden'
"This law didn’t just reshape banking, it rewrote the rules for our capital markets,” he said. “It handed the SEC sweeping new powers that have led to regulatory overreach, costly disclosure mandates, and mission creep into areas like corporate governance and executive compensation, areas historically governed by state law and protected by the business judgment rule.”
“For 15 years, these policies have burdened U.S. public companies while giving foreign competitors a leg up. Even worse, foreign private issuers were exempted from many of the most burdensome Dodd-Frank disclosure requirements,” Hill continued.
Hill acknowledged that healthy competition and innovation drive economic growth, creating more opportunities and better financial services for all Americans.
"Instead of burdening institutions with excessive red tape, we should be empowering them to better serve families, small businesses, and local communities,” he said. “That includes small and midsize companies trying to raise capital or grow through the public markets. Unfortunately, the complexity and costs imposed by Dodd-Frank have helped fuel the long-term decline in U.S. IPOs and discouraged companies from going public altogether.”
As the HFSC hearing examines the last 15 years, Hill encouraged representatives to do so with clear eyes.
"It’s also time to take a hard look at the rules that never made sense in the first place, rules that sit on the shelf and create needless uncertainty for market participants, just waiting for an unelected bureaucrat to dust them off and use them,” Hill said. “That’s not how our system should work. We must work together to craft thoughtful, bipartisan reforms that restore balance, foster growth, and protect consumers.”