Congressman Dan Kildee: Republican Dodd-Frank Repeal Gives Massive Handout to Wall Street on the Backs of Hardworking Americans
Vice Ranking Member Kildee Gives Remarks at Rules Committee Against Bill
Congressman Dan Kildee (MI-05), the Vice Ranking Member of the House Financial Services Committee, today delivered opening remarks at the Rules Committee as the U.S. House of Representatives begins consideration of H.R. 10, the Republican bill to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act. The bill, also known as the “Wrong Choice Act”, gets rid of consumer protections and Wall Street reforms designed to prevent another financial crisis.
Congressman Kildee’s remarks, as prepared for delivery are below:
Thank you Mr. Chairman, Ranking Member Slaughter, and Committee members for allowing me to speak today on H.R. 10.
Mr. Chairman, this bill, also known as the “Wrong Choice Act”, would eliminate the most important consumer protections and safeguards Congress put in place after the 2008 financial crisis. This is a bad bill, premised on extreme ideological ideas that put Wall Street ahead of Main Street and hardworking Americans.
This bill gives Wall Street yet another handout, while ignoring the needs of hardworking Americans. This Wrong Choice Act takes us back to the days of Wall Street predatory lending and profiting on the backs of consumers. The same reckless behavior that brought our economy to the brink of collapse in 2008.
Have we really forgotten just how much pain the Great Recession caused so many American families?
Let me take a moment to remind this Committee of just some of the impacts. More than 8 million Americans lost their jobs. At least 11 million people lost their homes through foreclosure. American families lost trillions in wealth. Our nation’s unemployment rate shot up to 10 percent. Many people have suffered permanently lower income and job prospects.
The Great Recession hit my home state of Michigan especially hard. Our state’s unemployment rate was almost 14 percent at the height of the financial crisis – hundreds of thousands of Michiganders lost their jobs, were evicted from their homes, or saw their retirement savings wiped out.
Members of Congress should not forget this pain and suffering. We cannot have amnesia about the impact of the financial crisis, or be swayed by the “alternative facts” regarding this bill.
Here are the actual facts: Wall Street reform and other Democratic policies have provided our country the strongest consumer protections in our history.
Since the enactment of Dodd-Frank Wall Street reform, our economy has experienced 85 consecutive months of private-sector job growth and added 16 million jobs. The unemployment rate is now at 4.3 percent. Wages are beginning to rise – not fast enough, for sure – but we are making steady progress. There is more that we can do to grow our economy – but this bill will not help that.
Bank lending has increased by 75 percent. At the same time, banks set an all-time record of $171 billion in profits just last year alone.
Community banks’ loan growth has been faster than bigger banks, thereby supporting residential, commercial, industrial and small business loans. This is happening because healthy banks that are playing by a fair set of rules are lending more.
Americans know that this Wrong Choice Act is the wrong direction for our country. Let me briefly highlight just a few of the reasons why:
In the words of Chairman Hensarling, the bill “functionally terminates” the Consumer Bureau by ending its authority to protect Americans from abusive and predatory practices by banks, lenders and student loan companies. This bill strips away the Consumer Bureau’s independent funding, hiding its consumer complaint database, and stops it from supervising Wall Street’s largest banks.
In Michigan alone, nearly 20,000 complaints were submitted to the Consumer Bureau to protect consumers since late 2011. So far, the Consumer Bureau has returned $12 billion to 29 million consumers. The Wrong Choice Act would gut this agency and work against these gains.
It is also unacceptable to create a loophole specifically for payday lenders and auto title lenders to harm low and moderate income Americans, by preventing the Consumer Bureau from setting appropriate safeguards.
Mr. Chairman, why would Republicans want to make it impossible for the Consumer Bureau to protect Americans from predatory lending and fraud?
The Wrong Choice Act also hurts seniors and Americans saving for retirement by repealing the requirement that financial advisers act in the best interests of their clients. This one provision alone will cause the loss of an estimated $17 billion a year in retirement savings for Americans, due to bad advice from financial advisers that is not made in the consumers’ best interests.
The Wrong Choice Act makes it harder for the Financial Stability Oversight Council to identify and mitigate threats to our financial system, and would abolish the Office of Financial Research, the entity charged with informing that Council about emerging risks to our financial system.
This bill would politicize regulators by eliminating their independent funding. After Fannie Mae and Freddie Mac failed in 2008, Congress specifically identified that one of the reasons for their failure was that the Federal Housing Finance Agency’s predecessor had become weak through inadequate funding. We fixed that in the Housing and Economic Recovery Act, but this bill returns us to the same failed system we had before.
Did we learn no lessons from the financial crisis at all?
Along the same lines, the Wrong Choice Act prevents the Federal Reserve, which played a critical role in stabilizing the housing and financial markets during the crisis, from making independent decisions about monetary policy, jeopardizing the American economy and American jobs.
Financial regulators would be subject to significant bureaucratic hurdles, including when to bring enforcement actions. As an example, regulators would not be able to take immediate action against those committing fraud. Instead, the Wrong Choice Act waters down regulators’ ability to quickly go after bad actors, forcing them to conduct costly and time-consuming cost-benefit analysis before taking action.
Why rig the system in favor of those defrauding hardworking middle class families?
The bill is even more extreme when it comes to the Securities and Exchange Commission’s authority to stop fraud. The Wrong Choice Act would tie the Commission’s hands by prohibiting it from banning Executives and Directors who have violated laws governing the financial industry.
Mr. Chairman, I’m sure you are aware of the letters of opposition that have been sent by hundreds of experts, advocates, shareholders, and every day Americans.
House Democrats will oppose this bill and stand up for American consumers. We will reject this Wrong Choice Act that Republicans are pushing, a bill that paves the way right back to the dark days of the financial crisis.
Thank you for yielding me time, and I’d be happy to answer any questions you might have.