Congressman Denny Heck urges his colleagues to vote against final passage of the Financial CHOICE Act
Washington, D.C. – With the U.S. House of Representatives scheduled to vote on H.R. 10, the Financial CHOICE Act of 2017, Congressman Denny Heck (WA-10) urged his colleagues on both sides of the aisle to reject this effort to dismantle critical Wall Street reform and consumer protections placed into law following the 2008 Wall Street crisis and economic recession.
“If we do not learn the lessons of the Great Recession and its causes, then we will be condemned to repeat them,” Heck said. “Passage of the Wrong Choice Act will only hasten the repeat of those very, very painful experiences.”
In a House Financial Services Committee markup of the bill on May 2, Congressman Heck explained some of his major concerns with the legislation.
On repeal of the Volcker rule: “This bill repeals the Volcker Rule, which bars banks from pouring their resources into trading and so instead forces them to make loans. This bill clears the path for banks and financial firms to grow, through mergers and acquisitions, to ever larger sizes, even though we know that small business credit comes from small banks. In combination, the provisions of this bill will siphon credit away from small businesses.”
On the purpose of the Consumer Financial Protection Bureau: “Con artists will always be with us. There are bad people who seek to gain advantage by putting other people at risk. And they are especially dangerous when it comes to certain products, like food, drugs, and financial services, so Americans have long recognized that one of the essential roles of government is protecting consumers from these dangers. In a huge step backwards, this bill cripples and neuters the Consumer Financial Protection Bureau. The Consumer Bureau has protected all manner of consumers from all sorts of abuses, but I want to highlight its work especially for vulnerable populations. One vulnerable population of special interest to me is active-duty servicemembers, who are often young with new families, and are also often stuck thousands of miles from home. We have set up special protections for these brave families, and the Consumer Bureau has been vigilant in flagging violations of these laws. I think it’s time to give them actual enforcement power.”
On the Consumer Bureau and regulatory fairness between financial sectors and products: “The Consumer Bureau was created, in part, to put all financial services companies under a uniform federal standard. That’s good for entrepreneurs, good for financial stability, and good for well-regulated companies that can compete on a level playing field. This bill tears up that uniform standard and sets the playing field askew again. It returns us to the days when picking your regulator matters more than picking the best innovations. I have never heard anyone advocate for an un-level playing field.”
If enacted into law, H.R. 10, the Financial CHOICE Act, or “Wrong Choice Act,” would:
- gut the independence of the Consumer Financial Protection Bureau, the agency created to protect consumers from unfair, deceptive, or abusive acts or practices of bad financial actors;
- retract safeguards such as stress tests and living wills for big banks that were put in place to prevent another Wall Street collapse that led to the 2008 financial crisis;
- revoke the emergency mechanism that prevents future bailouts (Orderly Liquidation Authority);
- abolish the Financial Stability Oversight Council’s ability to designate non-bank financial firms like AIG as “systemically important financial institutions” in order to supervise and regulate their activity;
- get rid of the Office of Financial Research which provides valuable research and analysis to help the Financial Stability Oversight Council identify problems before they reach a crisis level;
- subject all federal financial regulators (Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Consumer Financial Protection Bureau, National Credit Union Administration, Federal Housing Finance Agency) to the politically-dysfunctional funding process determined by Congress;
- eliminate the Department of Labor’s fiduciary rule meant to protect the investment decisions made on behalf of seniors and retirement savers; and
- make it harder for the Securities and Exchange Commission to enforce the law and use its authority to protect the financial industry from bad actors and misconduct.