June 16, 2011
Congressional Attack on Dodd-Frank Wall Street Reform Act Backfires
Support for Wall Street Reform Measures Voiced
WASHINGTON, D.C. – Today, conservative leaders staged two hearings in an effort to showcase so-called debilitating impacts of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Instead, their efforts only demonstrated how much support the law enjoys both in the financial sector and on Main Street.
“I hope Chairman Joe Walsh was listening carefully to the testimony today,” said Amit Narang, Public Citizen’s regulatory policy advocate following the hearing by the U.S. House of Representatives Small Business Subcommittee on Economic Growth. “We heard representatives from the banking lobby testify to the fact that Dodd-Frank includes some valuable measures. And testimony by the small business community explained how customers weren’t buying new products due to the recession brought on by the banks, not because they can’t get loans due to Dodd-Frank.”
Narang said the testimony echoed the National Federation of Independent Business’s most recent survey of small business, which showed that “one in four owners still report weak sales as their top business problem.” Only 3 percent cited financing as the culprit.
In praise of Dodd-Frank, Greg M. Ohlendorf, president and CEO of First Community Bank and Trust in Illinois, who was representing the Independent Community Bankers of America, referenced the too-big-to-fail provisions that “powerful interest groups are lobbying doggedly to undermine.” Ohlendorf emphasized that “the government must never again be forced to choose between propping up a failing firm at taxpayer expense and allowing it to fail and wreak havoc on the financial system.”
Echoing these sentiments, Thomas P. Boyle, vice chairman of State Bank of Countryside in Illinois, who was representing the American Bankers Association, lauded the act’s provision on structured dissolution of banks, which, for the first time, “provides a roadmap for large, systemically risky banks to close up shop without bringing down the entire financial system.”
“The key revelation of the House Financial Services Committee hearing today on global international impacts of Dodd-Frank was that global investors will flock to the best, safest run institutions,” said Bartlett Naylor, Public Citizen’s financial policy advocate. He noted that Sheila Bair, Republican-appointed chairman of the Federal Deposit Insurance Corp., also recognized this fact.
“Repairing the capital strength of our banking industry is the most important task facing regulators and a pre-condition for restoring a healthy and competitive economy,” Bair told Congress. “I would urge that ... key reforms in the Dodd-Frank Act be pursued vigorously to completion. These efforts are in the public interest, and will promote a competitive U.S. economy in the broadest sense of the word.”
“These were Chair Bair’s last words to Congress as head of the FDIC,” Naylor said. “I hope our lawmakers appreciate the candor of her injunction as she leaves office.”
“Today’s attempts to undermine the importance of the financial sector overhaul clearly backfired,” Narang said. “Regulation of this scope is far too important to be toyed with, and those who would thwart its implementation should be viewed as distinctly anti-consumer.”
Public Citizen is a national, nonprofit consumer advocacy organization based in Washington, D.C.
For more information, please visit www.citizen.org.