In two high-profile forums last week, Dodd-Frank, the financial "reform" law sold as targeting Wall Street, was shown to have a devastating effect on Main Street businesses -- from community banks to farmers and manufacturers. First came a June 11 hearing before Judge Ellen Huvelle of the federal district court of the District of Columbia. Attorneys for the State National Bank of Big Spring (Texas) argued that the small bank should have standing in a constitutional lawsuit against Dodd-Frank (in which the Competitive Enterprise Institute is a co-plaintiff), because of the damages it has suffered due to the law's costly rules and designation of large banks as "systemically important." As described in an excellent case summary by Andrew Evans in the Washington Free Beacon, the small Texas "bank argued that it has faced a significant regulatory compliance burden since the law has gone into effect. It also argued that the law places it at a competitive disadvantage with other banks that receive the label of being 'systemically important.'" Jim Purcell, the bank's chairman and CEO, elaborated further on how Dodd-Frank has effectively stopped the bank from issuing new mortgages and other financial product in Congressional testimony last year. While we will have to wait to see how the court will rule, a strong majority of the U.S. House of Representatives -- including many Democrats -- voted to scale back Dodd-Frank rules on derivatives. Again, arguments about Dodd-Frank hurting Main Street were at center stage. And in this case, they carried the day. In his floor speech supporting the bills, House Financial Services Committee Chairman Jeb Hensarling offered a tutorial on the widespread use of derivatives way beyond the world of Wall Street. "Many who may be tuning into this debate may not be quite familiar with the world of derivatives," Hensarling explained. But it is a way that many farmers, ranchers, manufacturers hedge risk in order to become successful companies and employ people and sell their goods and services at competitive prices. Hensarling then gave a list of examples of how derivatives affect his constituents in Texas. He noted that farm machinery companies like Deere "may do an interest rate swap as they finance a tractor for some farmer in rural East Texas that I may represent. So that derivative is directly linked to the cost and the availability of that tractor." Similarly, Southwest Airlines, headquartered in Hensarling hometown of Dallas, used derivatives to successfully hedge oil price spikes in 2007 and 2008, enabling it to keep prices low for passengers. But Hensarling and others warn that because Dodd-Frank makes it more costly for companies such as Deere and Southwest -- firms no one accuses of being complicit in the financial crisis -- prices of everything from tractors to airline tickets may shoot up. "All of a sudden, the price of a trip for grandparents to fly in from Kansas City to see their grandkids in Dallas, Texas just became more prohibitive," Hensarling explained. Despite a letter of opposition to the regulatory relief bills from Treasury Secretary Jack Lew, many Democrats found Hensarling's line of reasoning -- if not from Hensarling himself than from the "Main Street" businesses in their district. A staffer for Gwen Moore (D-Wis.), member of the Progressive Caucus and co-sponsor of Dodd-Frank who nevertheless voted for the relief bill, explained the bills' importance for Caterpillar, which has manufacturing facilities in Moore's district, explained to the Huffington Post: "They do business in Russia and Canada. They do mining and sell huge pieces of equipment that take years to construct ... and they need to hedge those risks." The main purpose of the bills is to ensure that "end users" such as Caterpillar, Deere, Southwest Airlines, farmers' cooperatives and other entities that are clearly non-financial are not subject to being regulated as "swaps dealers" simply because they use derivatives to hedge inflation and interest-rate risks. H.R. 634, The Business Risk Mitigation and Price Stabilization Act, which passed explicitly exempts these end users from costly margin and capital requirements similar to those of a stock or futures exchange. While it's true that Dodd-Frank Dodd-Frank never granted the Commodities Futures Trading Commission this authority, its silence allowed CFTC Chairman Gary Gensler to push at the edges. Under his proposed rules, basically anytime one of these entities does a derivative transaction with a bank, they are treated as a bank. Even the vast majority of House Democrats were taken aback by Gensler's brazenness at using the financial crisis to saddle needless red tape on farms and factories in their districts that had nothing to do with the crisis. So despite Lew's letter Lew criticizing the bills on behalf of the Obama administration, the House voted by an overwhelming margin of 411-12 for this regulatory relief. A similar bill, reining in the CFTC from treading onto the turf of the Securities and Exchange Commission in international derivatives transactions passed in a 301-124 vote. 73 Democrats, including Moore, voted "aye." Those spreading the gospel of regulation had a hissy fit. In an op-ed in the Washington Post, Occupy Wall Street activist Alexis Goldstein referred to the legislative package as the "Intimidate the CFTC Act." A better name for the bills would be the Stop the CFTC From Intimidating Main Street Act. The majority of derivatives did not play any role in the financial crisis. Rather, it was mortgage-related credit default swaps that were problematic, and they were problematic precisely because of the bad policies that had fueled the mortgage bubble — policies such as the expansion of the government-sponsored enterprises Fannie Mae and Freddie Mac and the mandates of Community Reinvestment Act. That Dodd-Frank didn't touch these entities is further evidence of its misplaced priorities. The CEI lawsuit goes after the heart of Dodd-Frank -- the unconstitutional structure of the Consumer Financial Protection Bureau and the Financial Stability Oversight Council -- but doesn't touch every provision. A victory would not directly affect, for instance, the CFTC overreach that the bills passed last week attempt to address. But it would further encourage the increased appetite by members of Congress of both parties to fix Dodd-Frank's flawed provisions. And that can only benefit Main Street.