We live in a capitalist nation, and this economic model has led the United States to be the economic powerhouse of the world.  The financial sector of our economy—banks, insurance companies, realty companies, etc.—are vital to our way of life.  This sector allows for citizens to store their earnings safely; borrow money for homes, cars, and businesses; and ensure that life and property are financially-backed in case of emergencies or other unforeseen circumstances.

But just as it does in all other sectors of the economy, an overzealous government produces overly-burdensome regulations on the financial sector.  It is one thing to regulate this sector to prevent predatory lending and unreasonable interest rates, but seeking to promulgate regulatory rules without transparency of process and publishing new regulations which are unclear is not only an affront to the industry, it is a recipe for disaster.

As it often does, the Congress reacted swiftly in the wake of the financial crisis of 2008.  The product was the Dodd-Frank Act of 2010—perhaps the most sweeping financial regulatory legislation in our history.  Not every provision in Dodd-Frank is outrageous, and Congress did need to do something to ensure that financial regulatory agencies weren’t caught “asleep at the wheel” again. But this bill has created more problems that it has solved.  It produced vague guidelines for regulation and left it to the regulatory agencies to fill in the gaps.  What is worse, the regulatory agencies did not have enough guidance to craft clear rules.  In many cases, the new regulations produced regulations that were entirely unclear, causing markets to act in an overly cautious manner because they did not know what was allowed and what was not. 

Dodd-Frank also led to the creation of the Consumer Financial Protection Bureau (CFPB), a “super agency” of unelected bureaucrats, which somehow largely escapes congressional oversight and thus far has conducted the majority of its rulemaking actions behind closed doors, much to the dismay of the American people and those it seeks to regulate.

We see now that the pendulum swung too far in the opposite direction, leading to restricted access to credit for individuals and businesses alike.  And what is perhaps the most troubling aspect of Dodd-Frank was that it did not outlaw future bailouts of the giant banks—it actually institutionalized the bailout model.  All these factors caused the economic recovery to be anemic rather than robust.

For my part, I have supported numerous targeted fixes to Dodd-Frank to ensure that credit is available, overly-vague and burdensome regulations are repealed, and more sensible regulations are clear.  I have also voted to rein in the nearly unaccountable CFPB to ensure Congress is able to perform its essential oversight role.  I will continue to fight to ensure that the U.S. financial sector is able to prosper and create jobs for the American people.