Marchant: "The Dodd-Frank Act is an Empty Effort at Financial Reform"

Statement

Congressman Kenny Marchant (TX-24) issued the following statement after the House passed the "Dodd-Frank Act" (H.R. 4173), which fails to reform Fannie Mae and Freddie Mac and will place more unrestrained power in the hands of irresponsible regulators.

"Today House Democrats chose to ignore the root causes of our financial meltdown and plowed irresponsibly ahead with an empty, politically-motivated effort at "reform" that will continue to thwart our economic recovery. I, along with many of my fellow Republicans, am a staunch advocate for meaningful reform. However, this bill offers no such thing. A majority of its 2,300 pages are hollow and superfluous powers, and the rest takes punitive measures against those who had nothing to do with the financial crisis.

"While the risky behavior of those in the subprime mortgage industry infected the lion's share of our financial sector, the regulators were asleep at the switch. Unfortunately, it is these very same regulators--many of them now top economic officials in the Obama administration--who are the real "winners' in this bill.

"The American people would be well served by subjecting large financial institutions to structured bankruptcy proceedings. Instead, the Dodd-Frank Act institutionalizes "too big to fail.' The American people would be well served by reforming Fannie Mae and Freddie Mac. Instead, we ignore them entirely and give them unlimited access to taxpayer money -- a cost that could reach $380 billion. The American people would be well served by instituting an exacting standard for regulators. Instead, we just create more of them. Perhaps most importantly, the American people would be well served by implementing policies that empower businesses large and small to create jobs and spur economic growth. Instead, we penalize community institutions with burdensome changes to capital requirements, penalize large institutions with nearly $6 billion of increased FDIC premiums, and penalize non-financial institutions with limits on their ability to manage risk.

"This bill does not best serve our constituents. While they are demanding Congress to reign in spending, this bill hikes taxes and makes bailouts permanent. As a proponent of limited government, we must force the private sector to pay for their own mess through traditional bankruptcy rather than strap it on the backs of American taxpayers. Despite the vigorous opposition of the bill, Democrats continue to pass partisan legislation and ignore the voice of the American people."

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