A new Competitive Enterprise Institute report identifies five urgent financial reform priorities needed to free people from regulations that hurt small businesses and entrepreneurs and restrict consumer financial choices.
“Congress and the President are reviewing and considering changes to financial laws and regulations that currently harm small banks, ordinary investors, entrepreneurs, and low income and middle class consumers,” said John Berlau, CEI senior fellow and author of the report. “But to really have an impact, we must tackle the worst offenders first. These include policies that prevent entrepreneurs from raising capital for their own small businesses and reduce opportunities and choices for middle class investors, like people interested in helping start-up companies.”
The top five financial reforms needed are:
- Eliminate Dodd-Frank’s Durbin Amendment, which imposes price controls on interchange fees charged by credit card companies to merchants, leading to higher bank fees and loss of free checking for many consumers.
- Reform the unconstitutional Consumer Financial Protection Bureau (CFPB) by making the director removable by the President and subjecting the bureau to congressional appropriations. This would make the CFPB more accountable to Congress and the President for any abuse of power against financial institutions and short-term lenders that poor and middle class consumers depend upon, like community banks, credit unions, and auto and real estate lenders.
- Eliminate mandates imposed by the 2002 Sarbanes-Oxley law that impose huge auditing costs on companies and make it prohibitive for companies to grow and attract investors.
- Eliminate New Deal-era securities laws that hurt entrepreneurs, small businesses, and middle class investors by shutting them out of wealth-building opportunities associated with investment-based crowdfunding.
- Eliminate Dodd-Frank’s conflict minerals disclosure mandates, which caused foreign companies to simply avoid doing business in the Congo and adjoining countries. That has meant less economic and job opportunities for the people in these conflict zones.
The report praises and offers suggestions for proposed legislation called the Financial CHOICE Act. This bill seeks to repeal and ease harmful provisions of the Dodd-Frank Act and other financial regulations.