House Financial Services Committee Conducts Hearing on Dodd-Frank

In mid-July, the House Financial Services Committee (HFSC) held a hearing titled “Dodd-Frank Turns 15: Lessons Learned and the Road Ahead” that explores the Dodd-Frank Act’s impact on the broader financial services marketplace. Witnesses included representatives from Securities Industry and Financial Markets Association (SIFMA), the Investment Company Institute (ICI), the Consumer Bankers Association, the American Enterprise Institute, and Better Markets.

In his opening remarks, HFSC Chairman French Hill (R-AR) noted that Dodd-Frank extended to the SEC, “sweeping new powers that have led to regulatory overreach, costly disclosure mandates, and mission creep into areas like corporate governance and executive compensation, areas historically governed by state law and protected by the business judgment rule.” He added that community banks have been forced to comply with regulations designed for larger depository institutions and “shifted activity outside the banking system.” In her statement, Ranking Member Maxine Waters (D-CA) stated that Republican Committee member’s support of current cryptocurrency legislation promotes the “rise of complex, poorly regulated financial instruments was precisely what sparked the 2008 crisis.” She noted Republicans on the Committee were attempting to roll back certain provisions that protect Main Street Americans as well as gut the Consumer Financial Protection Bureau (CFPB). The hearing examined numerous legislative measures that would impact the CFPB, the Federal Reserve, and the Financial Stability Oversight Council (FSOC), among other proposals. Questions focused mostly on federal banking regulations, including certain members of the Committee that emphasized the importance of an activities-based approach to financial stability rather than an entity-based approach. Republican members of the Committee voiced their intent to review and revisit provisions of the Dodd-Frank Act, including through the lens of recent SCOTUS rulings impacting agency interpretation and Chevron deference.

Click here to watch an archived video of the hearing.
Click here to read Chairman Hill’s opening remarks.
Click here to read Ranking Member Water’s opening remarks.