A few years ago, the federal government issued a regulation requiring banks to change their disclosure statements so that solid vertical lines separated columns on the sheet. Some small community banks were not able to easily create these vertical lines in their new electronic forms as required, so to improvise they used lines made of asterisks instead.
Regulators charged the banks for being in violation of the regulation.
I think we can all agree this is a bit excessive, and that's why I took action to oppose this and other burdensome regulations. Ultimately the regulators fixed this problem, but there are many more existing regulations just like it.
The Code of Federal Regulations contained more than 160,000 pages in 2009. Many regulations are ones we need, like the kind that prevent toxic chemicals from entering our water supply, but how many are frivolous and overly burdensome?
Regulations can serve a good purpose. They protect the health and safety of countless Americans doing everyday activities from flying in airplanes to eating food from the grocery store. At the same time, there's no doubt a regulation like the one on vertical lines is unnecessary and burdensome. In the recent debt ceiling negotiations, everyone fought over whether to raise or cut taxes. But why aren't more people talking about the mountains of unnecessary regulations--de facto taxes--affecting American families and small businesses?
Folks, it is time to cut the fat. If we are serious about creating jobs and boosting our economy, it is time to take a real look at overlapping and burdensome federal regulations.
That is why I am working as the Chair of the Blue Dog Task Force on Oversight and Regulatory Review to look at some of these regulations and push the federal government to make changes. The Task Force is charged with reviewing and taking steps to ease the burden of the nearly 8,000 federal regulations issued annually and to pay particularly close attention to regulations that burden small businesses, restrain economic growth, or hinder job creation in this tough economy.
Solid vertical lines do not protect consumers any more than vertical lines made out of asterisks. This type of regulation only creates confusion and hinders economic growth in Kentucky. I wish this were an isolated example, but I'm sorry to say that stories like this one are not uncommon.
When was the last time you saw a headline on one of the major news networks about a regulation affecting a small community bank? I understand why no one talks about regulations. They are boring, but they have a huge impact on our economy.
Small businesses currently face an annual regulatory cost of around $10,000 per employee, about a third more in costs than what larger companies pay. In his recent speech on job creation, President Obama called small businesses the places "where job creation begins" and asked Congress to make it easier for these companies to hire new employees. If that's going to happen, we need to stop saddling them with unnecessary regulations, especially while Kentucky's unemployment rate hovers around 10%.
The Blue Dog Coalition Task Force is trying to weigh in as much as possible on regulations that burden our small businesses. After the Blue Dogs wrote a letter to the Consumer Financial Protection Bureau (CFPB) using the vertical line example earlier this year, the CFPB announced an initiative to simplify new mortgage disclosure forms and get input from the public. The Blue Dogs also sent letters to independent federal agencies urging them to review their existing regulations before issuing new ones. A couple weeks later, the President echoed this sentiment with an improved executive order.
Our country's leaders are desperately looking for ways to boost the economy and create new jobs while also cutting federal spending. Tackling regulations that overlap or are burdensome can help us do just that.
We can't let something as frivolous as vertical lines hurt Kentucky's small businesses. The federal government needs to take a long, hard look at its regulations and weed out any that are unnecessary or burdensome. If we are serious about putting Americans back to work and getting our spending under control, it is time to cut the fat and make the government more efficient.