Dodd-Frank Debated in Congress: Onsite Reporting
WASHINGTON—It sounded like a success on paper.
The CFPB has returned $5.3 billion to 15 million consumers, and will provide $128 million to consumers as monetary relief, according to bureau. Prior to the creation of the CFPB, courtesy of The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, nearly 4 million private sector jobs were lost following the economic recession of 2008, Rep. Maxine Waters (D-Calif.) said.
In a House Financial Services hearing Thursday that focused on the fifth anniversary of Dodd-Frank, Waters said those 4 million jobs accounted for 665,000 jobs a month, and trillions of dollars of Americans' savings and retirement accounts disappeared as a result.
Waters said the nation became plagued by unemployment, the fall of the stock market and small business closures. All of which, she said, were the result of human error and bad choices.
She blamed the recession for hurting children who had to face multiple moves due to parents loss of employment, and marriages falling apart due to arguments over loss of income and stress over finances.
Those days are nearly over now, she said, with the Dodd-Frank Act ensuring wealth will never again be stripped away from American families and endangering the economy.
Waters also said she was tired of the Republican strategy of death by 1,000 cuts and added, just as the Supreme Court ruled to uphold Obamacare and legalize same-sex marriage, Dodd-Frank is settled law.
It sounded good on paper, Republicans at the hearing agreed, but they argued the reality didn't match the numbers.
"Dodd-Frank rewarded incompetency with more responsibility," Rep. Sean Duffy (R-Wis.) said, referring to the power given to regulators. "The law of unintended consequences has never been more apparent than when we look at Dodd-Frank."
Duffy said Dodd-Frank was an example of the nanny state going too far and made it difficult for small financial institutions to compete with big banks, while making big banks more profitable.
That was a sentiment shared by a majority of the panel guests at the hearing, including Prof. Todd Zywicki, foundation professor of law and executive director of the Law & Economics Center, George Mason University School of Law. Zywicki said Dodd-Frank had damned the economic growth and recovery and done little to increase consumer protection for Americans and their families. He said Dodd-Frank drove families to payday lenders as financial institutions were driven out of the mortgage industry and had to scrap programs like free checking.
Zywicki said the CFPB was given too much power and had requested even more access to Americans' banking information, even after the organization admitted the possibility of a hack on that data was possible, much like the recent attack on the Office of Personal Management.
In the end, the Congressional hearing began and ended much the same way as last year's on the same topic.
Is the country more stable five years after Dodd-Frank? According to Thursday's hearing, it depends on whom you ask.