If passed, the Financial Choice Act will serve as a “deregulatory life preserver” for community banking institutions, said the bill’s architect, House Financial Services Committee Chairman Jeb Hensarling (R-Texas), in remarks at the ABA Government Relations Summit. Hensarling, who has been an outspoken champion for regulatory reform, said that his bill is targeted toward “replacing mind-numbing complexity with simplicity.”
“There’s something fundamentally wrong in America when you have to lay off a loan officer to hire a compliance officer,” Hensarling said, acknowledging the significant compliance burden that Dodd-Frank Act’s 25,000 pages of final and proposed regulations have imposed on bankers since 2010. The goal of the Choice Act is to ensure that “a well-capitalized, qualifying bank will be empowered to remove government bureaucrats from its boardroom, and lend and invest freely,” he said.
With the Trump administration placing government regulations under the microscope, Hensarling was optimistic about what can be accomplished to bring relief to the financial industry, encouraging bankers to “keep hope alive” as the bill moves through the House and especially the Senate, where previous reform efforts have fallen short.
“Provisions of the Choice Act will be able to survive” review by the Senate, he said, but added that “there’s a great deal the administration can do. Much of Dodd-Frank was constructed by pen and phone, so it can be deconstructed by pen and phone.” Part of the lift the administration can provide involves staffing the federal regulatory agencies, Hensarling said, adding that he is “highly encouraged” by President Trump’s approach to personnel.