Economic Growth, Regulatory Relief, and Consumer Protection Act--Motion to Proceed
Floor Speech
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Mr. CORNYN. Mr. President, listening to my friend from New York--and he is my friend--we have worked together on a number of projects, even though we have diametrically opposed views on many policy prescriptions. To listen to him talk, the Tax Cuts and Jobs Act was a bad thing because it took money from the Federal Government and let the people who have earned it keep it and spend it the way they see fit.
I know they made a bad bet. They bet that it would fail. They bet that we would not get the votes to pass the Tax Cuts and Jobs Act, but we did, and the American people and American families are the beneficiaries of that.
I have come to this floor time and again, telling those stories, most recently about a plumbing company in Cleburne, TX, that has seen the benefits in terms of bonuses and increased pay, more take-home pay, along with the lowest claims for jobless benefits since 1969--the lowest claims for jobless benefits since 1969. But when we come to the floor, our Democratic colleagues, who bet against the American economy and this resurgence, the reawakening of this great economic engine known as the American economy--they bet against it. They are still sticking with the same old story, regardless of the facts.
I know the American people know better. They have noticed in their paychecks starting in February--because the tax tables were rewritten by the IRS--that they actually have more take-home pay. I have family members who are ecstatic about that. One of my daughters called and just couldn't be more excited, and I know that is happening to families all across the country.
I guess it is just one reason we have two political parties-- Democrats and Republicans--because while we may agree in some sense on the outcome, we certainly don't agree on the means to achieve that outcome. They are the party of Big Government, higher taxes, and more spending. We are the party of smaller government, effective government, one that provides essential services to the American people, like defending our Nation and maintaining peace around the world, but we believe in the individual. We believe the people who earn the money ought to be able to keep more of it and spend it as they see fit, and they believe that government ought to keep more of that and spend it as Washington sees fit. That is the reason we have two political parties, and people have to make their choices, and they do each election.
Yesterday, though, Mr. President, we voted to proceed to a very important bipartisan bill that would provide relief for small and midsized banks and credit unions across the country. This was an important step in what has been a long time coming.
You might ask: Why do we care about providing regulatory relief for banks and credit unions, especially the smaller ones that are in our communities? Well, that is where people go when they want to buy a house and they need a mortgage, when they need some startup money for a new business, where they need to go borrow money, for example, to buy seed and equipment to plant a crop. If you are in the agriculture sector, that is where they get access to credit, and that is why it is so important.
Unfortunately, since the Dodd-Frank law passed in 2010, we have seen a lot of that access to credit, particularly among small and medium- sized banks and credit unions, dry up because what they had to do was hire more people, but not for the purpose of making more loans. They hired more people because they needed to comply with the redtape and regulatory burden imposed by Washington.
We are peeling that back; we are reversing that--not for the big banks. The regulations stay in place, but for community banks and small credit unions, we are peeling that back so that it is a more rational and reasonable regulatory regime.
Ever since the law known as Dodd-Frank was passed in 2010, community and regional banks have been trying to get their voices heard. They have been clamoring to get lawmakers to understand that their businesses are much different from the titans of Wall Street that Dodd- Frank went after, following the financial crisis. Usually, when I am talking to the community bankers and the credit unions from my State, I say: You didn't cause the great recession of 2008. You didn't cause the great financial crisis, but you are the collateral damage. And they nod their heads sadly.
These banks want us to know they are from Main Street, not from Wall Street, and they want the rules to reflect that fact. After yesterday's vote, we finally started on a pathway not only to listening to their concerns but also to acting on them.
Dodd-Frank, the regulatory legislation that was passed in 2010, was almost 250 pages long. It required more than 10 Federal agencies to write more than 400 new rules, imposing some 27,000 mandates on financial institutions of every size, from large to small. In doing so, Dodd-Frank's rules imposed billions of dollars in new costs. Much of the weight fell on the backs of banks and credit unions that posed little systemic risk to the overall economy, and they have had a much harder time than Wall Street firms complying with excessive and complex reporting requirements.
Here is the irony. It is actually the big banks and big financial institutions that have the heft and the money to be able to comply with all of this new spider's web of regulations. It is the smaller community banks and credit unions that can't afford it, so they have been going out of business or being gobbled up in mergers by the big banks. This isn't what Congress intended in 2010. That wasn't the focus, but that is the consequence.
As the Senate majority leader said yesterday, based on one survey, compliance costs--those are the costs of dealing with the redtape in the financial sector--have gone up by 24 percent. What has happened as compliance costs have increased? Well, banks have closed in small towns in rural America, for one, which has led to a growing number of places with no bank branches at all.
In Texas, for example, we lost about 165 bank charters, a 26-percent reduction. In smaller rural areas that lacked multiple options to access credit, this is a serious problem. It is one of the many issues this bill we are voting on this week attempts to solve.
As the Wall Street Journal noted, the bill mainly ``eases administrative burdens'' on community banks. These banks incredibly ``make up about 98 percent of financial institutions, but [hold] only 15 percent of [U.S. banks' total] assets.''
Our colleague, the senior Senator from Idaho, the chairman of the Banking Committee, has spearheaded this effort, which is called the Economic Growth, Regulatory Relief, and Consumer Protection Act. I heard him say yesterday that it does all three of those things. It helps stimulate economic growth; it provides regulatory relief; and it protects consumers. We all appreciate the tremendous amount of hard work he has poured into the difficult and elaborate negotiations. His leadership has been indispensable.
As Senator Crapo has pointed out, the reforms in the bill will rightsize existing regulations on community and regional banks and credit unions while ensuring consumer safety at the same time. Anyone who lives and works in the real world knows that a one-size-fits-all approach just about never works, and banking and the financial sectors are no exception.
Dodd-Frank never worked as intended, but it was especially disastrous for smaller financial institutions that shouldn't be subject to many of its provisions, which weren't meant for them in the first place. The bill, therefore, will relieve the burden on small and midsized businesses that are being treated unfairly. Again, it is not so much the banks and the credit unions that we are worried about; it is the people they lend money to, who need access to credit to live their lives, to build their business. That is who we are mainly concerned about.
Surprisingly and gratefully, this bill is supported by Democrats who passed Dodd-Frank in the first place. This bill is supported by Democrats and Republicans, as well as the Trump administration and top Federal Reserve officials. This is actually a little bit of a bright light in an otherwise, sometimes, dark atmosphere here in Washington, DC, when it comes to dealing with some of these problems. This actually will help solve some real-world problems, and it is supported by Republicans and Democrats.
One specific objective is to raise the threshold at which banks face the stricter Dodd-Frank oversight, but it will also--and I want to emphasize this--keep in place requirements for much larger financial institutions, like rigorous stress testing, for example.
As I said, negotiations have been going on for this legislation for years; I think it is 4 years to be exact. But because of the resistance of the former administration, the Obama administration, as well as the former Senate majority leader, Senator Reid, we couldn't get these reforms passed before this week--and next week, if necessary. This is a new day, a new administration, a new leadership, and we are making progress.
In the meantime, though, American families and businesses lost out. Some farmers and ranchers, looking to actually buy what they needed to bring in the crops so that they could earn a living, couldn't get the loans they needed. Young people couldn't find a mortgage at a price they could afford and purchase their starter home.
In Texas, bankers confirmed that these reported difficulties are real. They recently signed a letter that urged the Senate to seize this opportunity and to pass this bill as quickly as possible. As the Independent Bankers Association of Texas has pointed out, community banks neither participated in nor profited from the excesses and bad behavior that precipitated the financial crisis, yet they are paying a disproportionately high price in attempting to deal with the aftermath. That just about sums it up.
Another group from my State, the Texas Bankers Association, has said that they are pleased to see this bill has finally been brought to the floor for a vote. That group represents about 450 banking institutions in my State. Sometimes we see the credit unions and the banks as rivals. They often see themselves as rivals for the same line of business. But the banks and credit unions agree. The credit unions in my State say that passing this bill would allow them to more fully serve their members' needs, whether that be providing mortgages or small business loans, instead of spending so many hours and so much money trying to deal with the redtape--and to what purpose? It doesn't help grow the economy. It doesn't help access to credit.
It is really regulatory overkill that we are trying to deal with here. As the majority leader said yesterday, there are a ``wide diversity of views on Dodd-Frank. But there is widespread agreement that we should not continue allowing'' unintended consequences to wreak havoc on community banks and small credit unions.
I hope all of our colleagues will join me in supporting the Economic Growth, Regulatory Relief, and Consumer Protection Act. It is good for American families. It is good for communities across our country that are underserved and for people who lack access to credit. It just makes sense.
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