tv Representative Jeb Hensarling Pledges to Roll Back the Dodd- Frank Act CSPAN May 2, 2017 10:34pm-11:00pm EDT
independent community bankers of america. it's about 20 minutes. >> please have a seat. i see that some of you are still finishing your breakfast. feel free to finish. i am used to speaking and having absolutely no one paid attention to anything i say. so this wouldn't be any different at all. for those of you that haven't been to the nation's capital before, something about my profession you collect a lot of t-shirts but second only to my texas tab there isn't one i will
value more than making community bank game great again. [applause] >> thank you for doing what you do and rolling up your sleeves to help build america's communities and thank you for helping build and capitalize our small businesses and for allowing people to achieve their american dream. i believe community banking is a noble profession and i thank you for entering into it. [applause] just a few months ago, we lived under a different
administration. i believe it was an administration that looked upon banking and believed the government was far superior to the market discipline. now the washington top-down regulations have choked our economy and the administration is working to make america opened for business and commerce that again. we lived in an administration that seemed almost embarrassed by the founders of the nation. by the laborers who have built prosperity in the past. today we have an administration that is committed to making america great again and making america great again i want to focus my remarks on banking and capital markets on economic
growth and stability for wall street and washington. but first, i want to maybe linger on a bigger picture. none of us wer were alive in the 19th century so we cannot truly appreciate the world's amazement at america's first few decades of greatness. but american life is bound up with his commerce and industry and the character of the people in the time of trying with hard work. alexis de tocqueville saw the commercial greatness of the u.s. and spent almost two years circling the globe to china. the americans he wrote something heroic into their way of trading. in 188 1888 and the best execute ability was found not in
government. but along the merchants manufacturers, bankers and railroad men plus great land speculators of trading and carrying companies. to go to bed a millionaire, wake up penniless and wake up all over again. everything we saw led us to conclude the creative energy explained in the american success. it is modest limit with personal initiative yet even in the 1840s there was great heroism and commerce but also saw something very worrisome on the horizon and an impending desire for collective security at the expense of individual
opportunity. it's what they termed schoolmasters. it was the most vigorous temperament but couldn't hold their head above the crowd and it doesn't destroy anything that prevents much of the inborn. it constrains them innovate, in the end so much is no more than a flock. one day they solve a competitiveness and imagination. those qualities that made america great ones and can make it great again.
de tocqueville was prophetic in every economic downturn has been followed by new agencies covering most sectors of the society. we have the opportunity and security so we must ask ourselves how many bureaucratic dictators are so complex as to become unintelligible. how much schoolmaster expertise guide the economy, how much of the rule of law has instead given way to the arbitrary discretionary rule of the bureaucratic groupers. the financial crisis gave birth to the dodd frank act and it's quite simply a colossal blunder and knee-jerk government response to a problem the
government largely created. [applause] president donald trump wants to do a number on dodd frank. house republicans stand ready to do just that. we will replace the mindnumbing complexities and most importantly a deregulatory life preserver to save the community banks. [applause] people hold both washington
accountable and by doing so unleash capital formations from sea to shining sea so that they can move yet again for the betterment of all of the citizens. there will be economic bank bailouts for nine. it's been long excluded. the regulation increased by almost 20% in the years leading up to the crisis but i expect i don't need to tell you that. it was and remains one of the heavily regulated industries in america, and we know that the government itself through the agencies demanded the purchase of trillions of dollars of risky mortgages guaranteed by unwilling taxpayers in fact almost 70% of all of the troubled mortgages that led to the crisis were backstopped by
the federal government. the left decided to roll the dice on so-called affordable housing and the nation lost big. why would we want to double down on the same regulatory regime as community bankers know all too well the damage done to the consumers and businesses. but just in case let me remind you of a few. 75% of banks use to offer free checking before they became law by 2016 only 38 percent did so. minimum balance requirements for free checking have quadrupled the fees and have been tripled. they are either under banked up by more than 3 million since the passage of the dodd frank law.
the remaining options cost more. it hurts the small businesses and struggling families. they want a qualified mortgage rule to fully kick in. many on the left remained silent. university of maryland researchers in a report found while dodd frank aimed at reducing mortgage and abuses against vulnerable bars ended sleeping regulations actually triggered a substantial distribution. again i suspect that you are noticed.
thus it is no surprise you've told me that it doesn't stand for qualified mortgages. regrettably that is what many of you have had to do and that is just wrong. any time you have to lay off a loan officer to make room for a compliance officer that's wrong. do you agree? [applause] it represents an even more dangerous prospect namely the prospect of politicized lending. the semblance of checks and balances and due process witness
the advent of regulations literally and figuratively of regulators literally and figuratively in your board rooms of affordable housing mandates and plain-vanilla mortgage requirements and the shameful and discredited operation chokepoint. the programs which the washington elites put them on the businesses and entire industries that the previous administration decided it just didn't like. let us also recall the second worst panic in history occurred due to the regulators saying there is virtually no risk and mortgage-backed securities and sovereign debt. fannie, freddie and great bonds. regulator political preference for the government debt supporting the market helped bring the global economy to its knees. why is it that a small business loan in athens texas in the fifth district.
what preference does that tell you and it's impossible to bring up the threat without bringing up that dodd frank agency known as the consumer financial protection bureau. it's arguably the most accountable in history and according to the judge panel atf the dc circuit court of appeals the structure is unconstitutional. there is any notion of checks and balances and he can launch investigations, shake you down all without due process. in the current burea bureau dirr virtually brags that he regulates through enforcement only announcing his view of the law after the fact. this deprives all participants
the regulatory relief will be better capitalized under dodd frank. they failed a substantial government assistance under our approach they will need a far more stringent 10% ratio. it's important to know the financial choice act doesn't force anything to raise the capital whetheallows the opporta different regime one that replaces the regulatory complexity in which the investors stand in the place of taxpayers the next time a too big to fail term collapses.
so in the regime only if it makes them more competitive and let them serve their customers better at lower cost. it's establishing the time to be found in section 165 on dodd frank will apply to the qualified banking organizations. they review them from the board room and land and invest freely. the key part of the plan is to end too big to fail once and for all. [applause] it creates a subchapter.
the authority approach to winding down the bankrupt institution gives a handful of bureaucrats vast amounts of arbitrary discretion and the certainty of law and precedent and must be repealed. when it comes to the regulatory regime it shouldn't be to downsize the banks that right sized them. they plan for their expansion and plan for their customers success and grow the economy for all. we must not only and the end the taxpayer-funded bailouts also washington's ability to designate any institutions as important. the designation grants the federal reserve dfederal reservo management authority over such institutions exposing huge swaths of the econom economies e federal government's production and gives them a competitive advantage.
financial choice act to designate the cities going forward. the financial institutions and financial well-being of consumers and societies therefore the plan imposes the toughest penalties in history for the financial fraud and deception. the reform plan has to overrule that made capital markets less liquid which was even confirmed by the recent federal reserve report. in addition, they've made the markets were fragile in
underlining the financial stability. financial choice act includes provisions to unleash opportunities for economic growth including numerous provisions that will help foster the formation of the job creators with regulatory relief. we will never again bailout of wall street bank, period. the big bank bailout is over. [applause] for anyone that engages in fraud and deception, tough penalties await the gang you're due process rights will be restored and if you maintain a strong balance sheet we will release you from the shackles of the
micromanagement and to be the best thinker that you can be and to help rebuild the economy and to be successful and not vilify it and we will once again let freedom reign from sea to shining sea. i begin my remarks by recalling the universal agreement from the greatness of the nation can we make america great again we should have no doubt. we have a presiden president ans working together we can bring about the regulatory relief and bring the state to the hill and place it under the constitutional principles of self-government for the common good. ending the bureaucratic nightmare that is known as dodd frank is a great start. it is indeed time to create hope and opportunity for investors, consumers and entrepreneurs come in just the financial choice act. today as soon as i leave the
if someone convinces us that there's less engagement with the world less acceptance of others and less investment on ourselves i know the path forward cannot include and does not include turning our backs on the shared values that built the nation. >> i am excited about the opportunity and make sure that