Onsite Coverage: Hensarling Pledges to Protect Tax Exemption
WASHINGTON — House Financial Services Chairman Jeb Hensarling (R-Texas) pledged Tuesday during CUNA’s GAC morning session that he opposes taxing credit unions.
The conservative House leader said one of the causes of America’s slow recovery is bad public policy. He specifically mentioned taxation on small businesses.
“But if I have anything to do with it, there will not be taxation on our credit unions,” Hensarling said, drawing applause from the crowd.
He also discussed three goals he has for the House Financial Services committee: reduce regulatory burden on small, community financial institutions, reform the housing market and challenge the Federal Reserve’s monetary policy
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Hensarling, a vocal critic of the Dodd-Frank Act and Consumer Financial Protection Bureau, said he disagrees with the premise that Dodd-Frank was necessary because regulators lacked the authority to prevent Wall Street from taking outside risks.
“There are very few instances of a lack of regulatory authority leading to the financial crisis,” he said.
Rather, Hensarling blamed the financial meltdown on Federal Reserve monetary policy that lowered rates and kept money too cheap and housing policies that “incented financial institutions to lend money to people to buy homes that they could not afford.”
He also criticized the “Orwellian” CFPB and Director Richard Cordray, saying the agency has the “ability to outlaw credit products that could help fulfill the American dream for many of your members.”
The recent District of Columbia Circuit Court of Appeals ruling that declared President Obama’s appointment of National Labor Relations Board members to be unconstitutional brings into question every single action of the CFPB, he said.
“How making consumer credit more expensive and less available, how that has anything to do with advancing consumer interest is beyond me,” he said.
Instead, he said competitive, transparent innovative markets that are vigorously policed for fraud is the best way to help consumers.
Anticipating Wednesday’s Financial Services Committee hearing that will feature witness Federal Reserve Chairman Ben Bernanke, Hensarling said he has his doubts Bernanke can successfully unwind the Fed’s expanded balance sheet.
“My fear is that QE [quantitative easing] infinity is creating outsized inflationary risks that can make us one day look back one day longingly and nostalgically at the Carter years,” he said. “The challenge is not monetary, it’s fiscal.”
If America returns to the original principles of the republic that include limited government and unlimited opportunity, there is “no limit to what we can achieve,” he said.