With Republicans in control of the House and Senate and White House come January, the priorities for financial reform in 2017 could be far different than what they appeared to be two or three months ago.
Among the leaders of the reform effort next year will be House Financial Services Committee Chairman Jeb Hensarling (R-Texas), who discussed some of his priorities in a recent address to the Exchequer Club. Hensarling said the overwhelming desire was change, a direct result of the voice of the voters in November.
“By electing Donald Trump our next president, the people of the Heartland rose up and sent a clear message to the ruling elites. They’re not going to take it anymore and they expect change,” Hensarling said in prepared remarks. “And they have every right to be upset. They see themselves working too hard and not getting ahead – like trying to run up the down escalator. This economy is still not working for working people.
“They’re upset at seeing their dreams for their children’s future diminished. They’re upset at seeing their values ridiculed and scorned by the establishment. And every day they see their liberties and opportunities slipping away as Washington grows larger, more intrusive, more distant, more powerful and more arrogant. So a hard-fought election may be over, but our work is just beginning.”
In a speech detailing many of the changes proposed in Hensarling’s Financial Choice Act bill – including Dodd-Frank changes to the Consumer Financial Protection Bureau (CFPB), Federal Reserve and other regulators, new too-big-to-fail practices, reform for Fannie Mae and Freddie Mac and much more – he focused in on two particular areas for examples of needed change.
The first is the Department of Labor’s fiduciary rule, which is set to take effect shortly.
“Altogether, the rule is going to impact about $3 trillion of hardworking Americans’ retirement assets. It will make access to financial advice more costly and less available to millions of lower and middle income workers – and no one in Congress voted for it,” he said. “The effects are already being felt months ahead of implementation. Merrill Lynch has already announced its clients will no longer be able to buy mutual funds in certain retirement accounts. Others have protested the rule’s particularly harmful impact on those who work at small businesses.
“The Trump Administration, working with our Republican majority in Congress, should make sure this harmful, bureaucratic rule does not go into effect as planned in just five months.”
The second example he singled out was the small-dollar lending/payday lending rule proposed by the CFPB.
“Another example is the CFPB’s rule that would shut down small dollar lenders without a single vote ever being cast in Congress,” Hensarling said. “These are just two examples of rules promulgated by the unelected and the unaccountable. These are just two rules that hurt struggling citizens. And these are two examples of rules the House Financial Services Committee, working with a President Trump, hopes to reverse.
“It is time for Congress to take greater responsibility for federal regulations, because when Congress allows its legislative authority to be usurped, the people’s right to both self-government and due process is undermined. Instead of being governed by the rule of law, citizens become more and more governed by the rule of rulers.”
Despite the majorities in Congress and a Republican president, Hensarling said there would have to be work with Democrats to enact needed reforms. He said he was prepared to make the effort.
“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,” he said.
He ticked off numbers from the last Congress, with the Financial Services Committee getting 76 bills passed by the House, two-thirds of the measures reported out of committee, with 32 bills signed into law, including nine that changed aspects of the Dodd-Frank Act.
“I’m told that’s one of the best – if not the best – performance record of any major House committee,” he said. “With government so divided, that’s not bad at all – and I’m proud of the hard work of so many of our members who reached across the aisle and put forward good, commonsense solutions.
“I have an open mind, but it is not an empty mind. And I never tire or falter in the advancement of the principles of freedom, free enterprise and limited constitutional government. … The work ahead will be hard and demands the best of us. But that’s exactly what the American people deserve.”