Eugene Grygo, Chief Content Editor, FTF News
Until recently, Congressman Jeb Hensarling, a Republican from Texas, was not that well known outside the beltway in Washington, D.C., and the hallways of Wall Street firms. But that is rapidly changing.
Given the GOP’s control of the federal government, Hensarling may well become the sworn enemy of U.S. Senator Elizabeth Warren, the divisive Democrat from Massachusetts.
The chairman of the House Financial Services Committee, Hensarling is in the catbird seat as far as the fate of the Dodd-Frank Act reforms and he is being considered for the post of Treasury secretary in the forthcoming administration for President Donald Trump.
For a while now under the radar, Hensarling has been promoting his plan to repeal the Dodd-Frank Act and replace it with the Financial CHOICE Act.
In fact, CHOICE, which is an acronym for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs, proposes:
- To eliminate the Consumer Financial Protection Bureau, the regulatory body proposed originally by Warren and created as part of Dodd-Frank;
- To repeal the Volcker Rule, which is meant to eliminate proprietary trading by banks and limit their size;
- To challenge and simplify the capital requirement levels of Dodd-Frank and Basel III;
- And an end to a bailing out banks that are Too Big to Fail (TBTF).
Recently, Hensarling offered more about the days ahead in a speech at the Exchequer Club on Nov.16, 2016. He is clearly signaling that he is going to fight for his reforms.
In the speech, he heaped praise upon the president-elect and the “Founders’ principles” that Hensarling says elevated Trump to the White House.
“So, a hard fought election may be over, but our work is just beginning,” Hensarling says. “And on the Financial Services Committee, these principles are embodied in the proposals we offer … such as the Financial CHOICE Act to promote economic growth for all and bank bailouts for none, the FORM Act to bring accountability and transparency to the Federal Reserve, the PATH Act to create a sustainable housing finance system, and numerous other ideas … to help Americans on Main Street achieve financial independence and a better, more hopeful life.”
Hensarling says that accountability is “at the heart” of the Financial CHOICE Act because “it makes sure every financial regulation passes a cost-benefit test, also known as common sense, so we’ll know a proposed rule’s impact on economic growth before it takes effect. With the exception of the Federal Reserve’s conduct of monetary policy, it puts all financial regulatory agencies on budget, because the bare minimum level of accountability to ‘We the People’ is to have their elected representatives in Congress control the power of the purse.”
He underscores that an “important provision of the Financial CHOICE Act requires all major financial regulations to first be approved by Congress before they can take effect.”
The committee chairman argues further that the Financial CHOICE Act holds Washington and Wall Street accountable in new ways.
“It imposes the toughest penalties in history for those who commit financial fraud and deception,” he says. “We must ensure consumers and investors are protected, treated fairly and have access to competitive, transparent and innovative markets that are vigorously policed for fraud and deception.”
In particular, his answer to bailing out via TBTF is “a simple answer to this problem: bankruptcy, not bailouts,” he says. “A new subchapter of the Bankruptcy Code tailored to specifically address the failure of a large, complex financial institution is part of our Financial CHOICE Act. Taxpayer bailouts of financial institutions must end and no company can remain too big to fail.”
His speech covered other areas of major concern to the GOP but Hensarling acknowledges that there are likely to be battles ahead. However, he argues that his committee has a history of bipartisanship and a high rate of success for the bills that have emanated from his committee.
“Even though Republicans will be nominally in charge of both ends of Pennsylvania Avenue soon, I remain painfully aware of the Senate’s cloture rules,” Hensarling says. “That means there will continue to be a need to work with the other party. I’m certainly willing to negotiate in good faith on any proposal — from the Financial CHOICE Act to housing finance reform and anything else that comes before our committee.”
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