Heritage Foundation Scholar Testifies on Financial Regulatory Reform
Last week, The House Financial Services Committee held a hearing entitled “Examination of the Federal Financial Regulatory System and Opportunities for Reform.”
The witness panel featured Norbert Michel, Senior Research Fellow in Financial Regulations at The Heritage Foundation.
Michel’s testimony centered around three reforms to help scale back ineffective federal regulations that place an undue burden on financial firms, destroy competition, create a false sense of security in the market, and ultimately harm consumers.
First, financial markets have far too many regulators. While consolidation is sorely needed to streamline the regulatory process, too much consolation could lead to an unaccountable super regulator. Michel suggests curtailing the Federal Reserve’s improper role in regulation under Dodd-Frank as an important step to take.
Second, Dodd-Frank created an unaccountable, unnecessary regulatory nightmare in the Consumer Financial Protection Bureau (CFPB). Dodd-Frank merely transferred enforcement authority of existing statutes to the CFPB. If Congress were to get rid of the CFPB today and transfer any essential duties to the Federal Trade Commission (FTC), there would be no shortage of consumer protections. In fact, consumers would be better off without a rogue federal agency policing financial markets with little regard for due process.
Third, Congress can give the Trump Administration reorganization authority to help restructure the mess of federal regulatory agencies. Especially after Trump’s executive order highlighting the need for effective and efficient financial regulations, the administration has clearly expressed willingness to enact positive changes likely difficult for Congress to accomplish.
You can watch the hearing below or click here.