Congressman Bob Goodlatte issued the following statement after chairing today's House Judiciary Subcommittee on Intellectual Property, Competition and the Internet regarding the effects of the Dodd Frank Wall Street Reform and Consumer Protection Act on financial services competition. Mr. Ellis Gutshall, President and Chief Executive Officer of Valley Financial Corporation and Valley Bank in Roanoke, joined the Subcommittee as a member of the distinguished panel of witnesses for this hearing.
"Dodd-Frank is just another example of the federal government meddling in the free market," said Congressman Goodlatte. "The regulatory burdens enacted by Dodd-Frank can be felt across the financial services industry. These regulations disproportionately impact small, local banks making it harder for these entities to compete. Greater compliance costs under Dodd-Frank could drive many of these community banks out of business or force them to merge with larger competitors.
"If this burdensome law results in community banks leaving the market, not only will competition suffer, but so will the communities and small businesses that these banks serve. Mr. Gutshall testified today that every dollar used to pay compliance costs for these regulations is roughly $10 that cannot be used for potential loans or investments. Small and mid-size banks account for 54 percent of small business lending. These are loans America's small businesses need to help create jobs. What's worse is that this law has made permanent Washington's bailout mentality by creating a special avenue to protect creditors of the largest financial institutions. This government backing only perpetuates "too big to fail.'
"The Dodd-Frank Act, like the Administration's other signature legislative achievement, Obamacare, will have the effect of hindering competition in one of the most important sectors of our economy. I will continue to work to reverse these onerous regulations and put in place policies that encourage competition and allow the free market to prosper."