Why does Dodd-Frank exist?

Jun 06, 2017 | Communications •

Did you know that Dodd-Frank includes more regulations than ALL OTHER bills passed during Obama’s presidency COMBINED? And yes — that includes Obamacare!

With so much red tape, Dodd-Frank has made life harder for farmers, business owners, and families across this country, and it’s time for a change.

That’s just one of the reasons why we’re voting on the Financial CHOICE Act this week.

We know that economic policy can be a little wonky, so we asked Reps. Scott Tipton and Andy Barr to help us break it down. Here’s what they had to say:


In the early 2000s, changes to federal housing policies encouraged banks to help people buy houses when they really couldn’t afford them. The banks were issuing bad mortgages, bundling them together and selling them like they were high quality investments. The problem? These investments weren’t high quality. They were made up of high risk mortgages. When people stopped paying their mortgages, the housing market crashed in 2007 and the recession soon followed.

Families lost their homes, and people lost their pensions and life savings. So what did the federal government do? It bailed out the “too big to fail” banks, to the tune of $700 billion, in an effort to stabilize the market. To put that money in perspective — that’s more than seven times what Bill Gates is worth!

Although government involvement in the economy was largely what caused the crash, the government responded by involving itself even further. Because, of course.

That, friends, is what led to the the Dodd–Frank Wall Street Reform and Consumer Protection Act — more commonly known as Dodd-Frank.


The bailouts? The poor lending practices? Dodd-Frank was supposed to make that all a thing of the past. The goal was to protect Americans from bailouts, financial fraud, and abusive banking. It was going to be tough on Wall Street, and give Main Street a fighting chance against the 1%.  


To understand the damage Dodd-Frank has done, think of those goals we just listed…then do the exact opposite.

Instead of being tough on Wall Street, Dodd-Frank put many on Main Street out of business. Community banks and credit unions don’t have the resources to navigate the regulations, so they’ve become “too small to succeed.” It’s gotten so bad that we’re losing an average of 1 community bank or credit union every single day. And without this competition, big banks are even bigger than they were before. Oops!

It also created a rogue agency, ironically called the Consumer Financial Protection Bureau, which has a virtually unlimited money supply and pumps out regulations that hurt consumers — without any oversight.

We’ve had the slowest, weakest economic recovery in 70 years. Dodd-Frank has made having access to banking services more difficult, as fewer and fewer banks offer free checking and the minimum balances to open an account continue to grow.

We could go on and on, but the gist of it is this: Dodd-Frank is the WORST.


The Financial CHOICE Act does what Dodd-Frank intended to do, but in a smarter, more commonsense way that will actually yield results.

It protects community banks and credit unions from regulations that were never meant to be applied to them in the first place. The time community banks spend complying with Dodd-Frank regulations should be spent supporting small businesses in their communities. The Financial CHOICE Act makes it possible for these small businesses to get the capital they need to expand, create more jobs, and help grow the economy by getting the government off their backs.

Too big to fail will no longer be a thing because the Financial CHOICE Act ends taxpayer-funded bailouts for big banks. If a big bank fails, it will go through bankruptcy, not a bailout.

It imposes the toughest penalties for financial fraud IN HISTORY.

And Americans will have more choices and greater access because banks won’t be passing the costs of complying with taxes onto their customers.

Visit financialchoice.gop to learn more!

Here’s what House Republicans are saying about CHOICE:

Financial Services Committee Chair Jeb Hensarling (R-TX) on MSNBC:

“[The Financial CHOICE Act] guarantees economic growth for all, bank bailouts for none. The best form of consumer protection is competitive, innovative, transparent markets that are vigorously policed for force and fraud. But the so-called CFPB… which perhaps is the most unaccountable and powerful agency in the history of the Republic in many cases has hurt consumers. We’re trying to replace it with something called the Consumer Law Enforcement Agency, which… [will be] there to enforce the law, not make up the law.”

Rep. Steve Pearce (R-NM) in the Washington Examiner: How the CFPB ignores rural families

The CFPB was tasked with protecting consumers — a laudable goal. Very quickly though, the CFPB began to show it had no idea how or why many elements of the credit markets were established. As they began to regulate those elements out of existence, credit to the poor began to dry up. People in New Mexico soon began to see their opportunities disappear because their sources of credit were diminishing before their eyes.

Read his op-ed in its entirety here.

Rep. Dennis Ross (R-FL) in Florida Politics: Giving community banks, credit unions Financial CHOICE

“This legislation protects taxpayers, ends bank bailouts, empowers investors and holds government bureaucracies accountable. It makes it easier for hardworking Americans to save and invest for retirement, college and their futures. Importantly, this legislation increases access to, and reduces the cost of, credit for families that want to purchase a home or start a business. Finally, the Financial CHOICE Act holds Wall Street accountable and increases civil and criminal penalties for financial fraud and insider trading to their highest levels in history.”

Click here to read more

Rep. French Hill (R-AR): Let’s offer relief

“The Dodd-Frank mantra of ‘too small to succeed’ is coming to an end. The House is set to vote on the Financial CHOICE Act this week. Our bill gives smaller financial institutions the regulatory relief they need to return to their important roles in providing consumers, small businesses, and entrepreneurs with competitive services and access to credit and capital.”

 Rep. Andy Barr (R-KY) on Fox Business:

“The Financial CHOICE Act is as important as tax reform — as important as replacing Obamacare. Because if we don’t unclog the plumbing of the economy, if we don’t heal our capital markets, then we are not going to be able to achieve the …growth that we know the economy has the potential for. …we need to provide relief to community financial institutions, which are the credit providers for the entrepreneurs, the small businesses, the job creators in this country.”

Rep. Bill Huizenga (R-MI): The era of bailouts is over

“The Financial CHOICE Act will cut the deficit by $24 billion, end taxpayer funded bailouts, and provide much needed regulatory relief for community banks and credit unions so they can support small business job creation.”

Rep. Doug Lamborn (R-CO): Helping Americans, not big banks 

“The purpose of regulations should always be to protect American families and businesses–not big banks and special interests. The Financial CHOICE act, which is coming to the House Floor this week, will strengthen consumer protections and end taxpayer bailouts for Wall Street.”

Rep. Keith Rothfus: It’s time to bring the American Dream back within reach

“When I talk to constituents in western Pennsylvania, I hear a common concern: some in this country are thriving and getting ahead, but many believe the American dream is moving further from their reach. Big businesses, the wealthy and well-connected are doing fine, while millions of hard-working Americans – mom-and-pop business owners and those on Main Street – face one barrier after another to their success.”