Justin Sykes

Trump Should Kill DOL Fiduciary Rule

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Posted by Justin Sykes on Thursday, November 17th, 2016, 11:49 AM PERMALINK

One of President-elect Trump’s goals for 2017 should be to kill the Department of Labor’s (DOL) rule for financial advisors, commonly referred to as the “Fiduciary Rule”. The rule spans over one thousand pages and will reduce the ability of financial advisors to give advice to IRA and 401(k) holders, essentially putting the federal government in between Americans and their retirement savings decisions.

Estimates show the fiduciary rule could disqualify up to 7 million IRA holders from investment advice, and potentially reduce the number of IRAs opened annually by between 300,000 and 400,000. 

The Trump administration could kill the rule in one of two ways. First, with a Republican controlled House and Senate, President Trump could look to do so by passing a bill that would effectively overturn the rule.

There has already been wide opposition to the rule expressed in both the House and Senate, with Representatives Phil Roe (R-Tenn.), Charles Boustany (R-La.) and Ann Wagner (R-Mo.) introducing a resolution earlier this year under the Congressional Review Act to block the rule. A similar resolution was introduced in the Senate by Senator Johnny Isakson (R-Ga.). 

Alternatively, Trump’s second option and more likely choice would be to roll back the fiduciary rule using a new rule-making process at the Labor Department. With new DOL leadership, the Trump administration could delay the rule indefinitely. This delay would allow DOL officials under Trump to reverse the fiduciary rule altogether. 

Whatever path President Trump might decide on, the need to kill the costly and burdensome fiduciary rule is huge. Killing the fiduciary rule before the April 10th 2017 implementation date would protect low-and-middle income families, small businesses, and employees from increased retirement savings costs and reduced access to investment advice.


Photo credit: Gage Skidmore 

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President Trump Plans to "Dismantle the Dodd-Frank Act"

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Posted by Justin Sykes on Thursday, November 10th, 2016, 2:08 PM PERMALINK

In a statement released today President-elect Donald Trump’s transition team made it clear that one of Trump’s first priorities will be dismantling the massive 2010 Dodd-Frank Act.

Trump has repeatedly criticized the Dodd-Frank Act for the economically disastrous impact it has had on the American economy, killing community banks, reducing access to credit, and increasing the regulatory burden on American businesses.

The statement issued on the Trump transition team website reads:

“The Dodd-Frank economy does not work for working people. Bureaucratic red tape and Washington mandates are not the answer. The Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation."

Among some of the items President-elect Trump has set his sights on as it relates to the Dodd-Frank Act are ending the Volcker Rule and reining in and reforming the Consumer Financial Protection Bureau (CFPB).

The Trump team will have a legislative head start once they take office in January as House Financial Services Committee Chairman Jeb Hensarling (R-Texas) has already laid out a Dodd-Frank reform blueprint with his Financial CHOICE Act (H.R. 5983), which passed out of Committee recently.  


Photo credit: Gage Skidmore

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Tim Kaine Wants to Increase Dodd-Frank Burden on Main Street America

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Posted by Justin Sykes on Friday, October 21st, 2016, 12:04 PM PERMALINK

In a recent interview Democratic Vice Presidential Candidate Tim Kaine admitted that a Hillary Clinton White House would look to increase the burden of Dodd-Frank regulations in a misguided effort to help “Main Street”. The irony of Kaine’s plan is that small businesses on America’s Main Streets are already being crushed by Dodd-Frank regulations, and increasing such regulations will only serve to worsen the problem.  

Speaking on CNBC’s “Closing Bell” Kaine made it clear his goals are aligned with the far left liberal branch of the Democratic Party. Kaine praised Sen. Bernie Sanders (I-Vt.) and Sen. Elizabeth Warren (D- Mass.) saying both, “have really important ideas that they’ve put on the table.” Clearly Kaine and the Clinton campaign are grossly out of touch.

Kaine went on to say that “we’ve got to keep regulation…on Wall Street, so that Wall Street doesn’t tank Main Street again” and that, “we put Dodd-Frank in place for a reason, and we want to strengthen it.” However the fact is Dodd-Frank has done nothing to improve the economic health of small businesses and has instead reduced access to the credit and capital many on Main Street need to survive and grow.

It is no secret that new and small businesses play an outsized role in creating jobs and opportunities in the U.S. economy. Yet new reports show a massive decrease in new business growth in recent years, and that slow down has been a product of reduced borrowing opportunities for new and small businesses. 

For example, in 1980 firms in their first year accounted for 13 percent of all companies, but since 2010 that rate has fallen to around 8 percent. Similarly, in the 1990's the average new business hired over 7 workers, while in 2011 the average new business hired roughly 4 workers. Tim Kaine would clearly attribute this reduction to Hillary’s narrative of “Wall Street is crushing the little guy”, but such an argument is misplaced and simply political rhetoric.

The fact is two of the most disastrous results from Dodd-Frank that have impacted growth in small businesses are reduced access to credit due to community bank closures and consolidation, and an economically crushing regulatory burden. 

Community banks (those with less than $10 billion in assets) serve as a primary source of credit for many new and small businesses. According to a 2015 Small Business Credit Survey, small business loan applicants were successful 76 percent of the time at small banks, versus 58 percent of the time at large banks.

Yet since the passage of Dodd-Frank, such sources of credit for many on Main Street looking to start or grow small businesses have dried up. In fact, since Dodd-Frank was enacted, the number of community banks has shrunk by 14 percent. Thus it should come as no surprise that since 2008 small businesses have seen a 15 percent decrease in lending.

Thus the issue is why Tim Kaine and Hillary Clinton would want to “strengthen” Dodd-Frank in order to “help” Main Street. Clearly the resulting regulatory burden of Dodd-Frank has done nothing to help small businesses and instead has limited access to credit and inhibited economic growth on Main Streets across America. 


Photo credit: Emily

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Dodd-Frank is Crushing Small Businesses and Startups in America

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Posted by Justin Sykes, Johnathan Sargent on Thursday, October 20th, 2016, 2:47 PM PERMALINK

After 6 years, Dodd-Frank’s legacy is hindering American innovation. Since its passage, the Dodd-Frank Act has unleashed an onslaught of large and complex regulations. Because of these regulations the growth of American small businesses and startups has hit an all-time low. In a report by Third Way, these regulations are examined as a primary factor for this phenomenon.

The Third Way report found that while new businesses have played a historically large role in U.S. job creation, trends show that in recent years there has been a growing gap in borrowing opportunities for small businesses and startups. Contrast this with the fact that lending to large businesses has surged in recent years. Such trends can be tied to the fact that small banks are being forced to either consolidate or shutter their operations as a result of Dodd-Frank regulations.   

The impact of Dodd-Frank regulations on small businesses and startups begins with their effect on small banks, such as community banks. Dodd-Frank regulations have led to higher compliance costs, which are economically disastrous for smaller banks because they lack the vast resources that their larger competitors possess. According to a study by the Mercatus Center, 90 percent of banks stated that compliance costs have increased since 2010. The report by Third Way highlights that such community and small banks “bear a disproportionate regulatory burden.”

Because of these increased compliance costs, small banks are reducing the number of services that they provide. It is also the case that as community banks close due to skyrocketing compliance costs and other regulatory factors, sources of credit for small businesses are simply no longer available. This has led to a decrease in small business lending in the U.S.

For instance, since 2008 lending to small businesses has decreased by 15%, while lending to big businesses has increased by 35%. According to a 2015 Small Business Credit Survey, small business applicants were successful 76% of the time at small banks, versus 58% of the time at large banks. Thus as community banks close or consolidate, small business lending dries up. 

Small businesses are then left with no other option than to seek loans from lager banks, which cannot provide the same level of personalized service and competitive rates that community and small banks can provide. Ironically, as a result of Dodd-Frank, many large banks have also been forced to eliminate loans that after the financial crisis would be seen as too “risky”. For the most part, this means eliminating loans to businesses with less than $2 million in revenue, or alternatively eliminating loans less than $100,000 altogether.

This lack of access to credit has led to a reduction in the amount of startup firms in the U.S. In 1980, firms in their first year accounted for 13% of all companies, yet since 2010 that rate has dropped to roughly 8%. According to a 2015 survey by Federal Reserve banks, small businesses and startups are finding it increasingly difficult to obtain needed credit. The survey found that 63% of microbusinesses (firms with annual revenue under $100,000) and 58% of startups (firms less than two years old) were unable to realize their funding needs.

It is apparent that the onerous regulations imposed by Dodd-Frank have contributed to the decrease in startups and reduced access to credit for small businesses. This phenomenon not only hinders economic growth in the U.S., but impacts consumers as small businesses and startups are often leaders in product innovation. For those supporting Dodd-Frank, this should be a wake up call that it is time to look to much needed reforms that will encourage small business growth and innovation, instead of deterring innovation and competition in the market.

 Photo Credit: Ian Lamont

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Hillary Clinton: Dodd-Frank Passed for "Political Reasons"

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Posted by Justin Sykes on Thursday, October 13th, 2016, 1:42 PM PERMALINK

Hillary Clinton has made it a point throughout her campaign to make it clear that she is the candidate that will hold Wall Street and the banking industry accountable, and continue to carry the torch of big government control over the market that was lit by the Dodd-Frank Act six years ago. Clinton even made it a point to have the Dodd-Frank poster child, Senator Elizabeth Warren (D-Mass.), appear with her repeatedly on the campaign trail.

However recently released e-mails from inside the Clinton campaign detail excerpts from her infamous paid speeches to Wall Street that show her so-called principled stance against Wall Street and support for Dodd-Frank was not so much principled as it was a complete and outright lie to the American people.

In a speech to Goldman Sachs in 2013, Clinton evidenced her true lack of support for the Dodd-Frank Act, alluding to the fact that Dodd-Frank and the over 20,000 pages of resulting regulations were not passed for the benefit of American consumers, but simply for political optics at the time. Clinton stated that: 

“There was a lot of complaining about Dodd-Frank, but there was also a need to do something because for political reasons, if you were an elected member of Congress and…everybody in the press is saying it’s all the fault of Wall Street, you can’t sit idly by and do nothing…and I think the jury is still out on that because it was very difficult to sort of sort through it all.”

In similar remarks to Deutsche bank in 2014, Clinton made it clear that deep down she thought financial reform following the financial crisis should come from the financial industry, thus calling into question her praise of Dodd-Frank. Clinton remarked that:

“Teddy Roosevelt…took on what he saw as excesses in the economy, but he also stood against the excesses in politics. He didn’t want to unleash a lot of nationalist, populist reaction…Today there’s more that can and should be done that really has to come from the industry itself…and I really believe that our country and all of you are up to that job.”

Thus the questions that arise are if Dodd-Frank was passed solely for “political reasons” and not as a real and necessary response to the financial crisis as Americans were lead to believe, then why is Clinton still supporting Dodd-Frank and how many other lawmakers supported Dodd-Frank solely for political reasons?

If big government “excesses in politics” are not the answer but instead, as Clinton remarked, the industry and market itself should correct such issues, why does Clinton continue to advocate for anti-free market policy such as Dodd-Frank? 

Clearly Mrs. Clinton has no problem playing politics when it benefits her, and is all too willing to support legislation that throws the economy and American consumers under the Dodd-Frank bus solely for political reasons. 

Sadly, average Americans do not see the benefit of Clinton’s political reasoning, and are instead stuck with the Dodd-Frank behemoth that has led to increased financial costs, reduced access to capital, and a general sense of helplessness in the face of an out of control regulatory regime.


Photo credit: Brookings Institution 

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Hillary Clinton's "Fracking" Double-Speak

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Posted by Justin Sykes on Wednesday, October 12th, 2016, 11:30 AM PERMALINK

During the March 6th Democratic debate in Michigan, Hillary Clinton voiced her opposition to the energy extraction method known as “hydraulic fracturing.” Responding to a question on “fracking” during the debate, Clinton stated that, “by the time we get through all of my conditions, I do not think there will be many places in America where fracking will continue to take place.”

However, newly leaked e-mails from inside the Clinton camp offer insight into what was really driving her fracking opposition. Spoiler alert – it was not some ideologically based concern over the safety of fracking or the environment, but instead Clinton’s desire to win at all costs. 

According to the newly released e-mails, during the primaries one of Clinton’s top aides in Colorado suggested that she take a “reluctant tone” on fracking, likely because her appreciation for the extraction method would not play well with those on the far left.  That same aid urged her to recruit a liberal ally to essentially conduct a political hit job on then candidate Bernie Sanders for his suggested ban on fracking.

However the most revealing insight into Clinton’s double-speak on fracking came from leaked excerpts from one of her infamous paid corporate speeches given to Deutsche Bank in 2013. During the speech Clinton praised the economic benefits of fracking and touted her goal of helping the U.S. “become the number one oil and gas producer.” Clearly there is disconnect between what Clinton says publicly and what she says when she thinks no one is listening. 

The obvious conclusion that can be reached is that Clinton realizes the economic benefits of hydraulic fracturing, which is also evidenced by her tenure as Secretary of State during which time she advocated for expanding hydraulic fracturing technology to countries across the globe.

It is also clear that Clinton would otherwise support the extraction method, and oil and gas development in general, were it not for her ability to ignore reality and her desire to win at all costs. This includes ignoring the fact that fracking has led to a 60 percent reduction in imported energy, billions in increased GDP, and over 2 million jobs created

While Hillary Clinton would have preferred to keep American voters in the dark about her stance on fracking, the recently leaked e-mails support a different narrative. A narrative that shows her stance on energy is not to be trusted, and that Clinton is willing to ignore facts and sacrifice U.S. energy independence in order to appease a small group of far left extremists. 


Photo credit: State Chancellery  

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ATR Releases Coalition Letter Opposing the Postal Service Reform Act (H.R. 5714)

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Posted by Justin Sykes on Tuesday, September 6th, 2016, 9:36 AM PERMALINK

Americans for Tax Reform, joined by 21 free market organizations, today sent an open letter to Congress urging lawmakers to oppose H.R. 5714, the “Postal Service Reform Act of 2016” introduced by House Government Oversight Committee Chairman Jason Chaffetz (R-Utah), and the Committee’s Ranking Member Elijah Cummings (D-Md.).

Since 2007, USPS has posted more than $50 billion in losses and faces $125 billion in unfunded liabilities, despite an estimated $18 billion annually in indirect subsidies.

While reforms are needed, the Postal Service Reform Act ignores basic needed reforms to USPS, and instead increases rates, shifts USPS’s financial burden onto the American public, and allows for the diversion of resources away from the core mission of mail delivery.

Read the full letter below or here:

To Members of the U.S. Congress:

We, the undersigned organizations, representing millions of taxpayers and consumers nationwide, urge Congress to oppose H.R. 5714, the “Postal Service Reform Act of 2016” introduced by House Government Oversight Committee Chairman Jason Chaffetz, and the Committee’s Ranking Member Elijah Cummings.

For years, the U.S. Postal Service (USPS) has suffered from operational and financial inefficiencies, and while reforms are needed, H.R. 5714 misses the mark and may actually exacerbate the issues facing USPS.

The USPS enjoys a monopoly on the delivery of first-class and standard mail and is exempt from state and local sales, income, and property taxes. The USPS also has the power of eminent domain, is not subject to local zoning ordinances, and has borrowed billions from the Treasury at subsidized interest rates.

Despite such special treatment, which is estimated to be $18 billion annually in indirect subsidies, USPS’s financial health is continually waning. Since 2007, USPS has posted more than $50 billion in losses and faces $125 billion in unfunded liabilities. Much of this stems from USPS’s inability to adapt to changing markets, congressional impediments, and union quagmires.

Many of the reforms provided for in H.R. 5714 lead USPS further away from the core mission of mail delivery, unfairly shift the Postal Service’s financial burdens onto the American public, and fail to address many of the underlying issues facing USPS.

Diversion to Nonpostal Products and Services. Key provisions contained in H.R. 5714 would allow the Postal Service to divert resources away from the core mission of mail delivery to providing nonpostal products and services to state, local, and tribal governments and federal agencies. The Act creates a “Chief Innovation Officer” tasked with managing the development and implementation of nonpostal products. While intended to generate new sources of revenue, such provisions are only a point of distraction, and will see the Postal Service further competing with private firms.

Postal Rate Reforms and Increases. Chairman Chaffetz’s reform bill would allow the Postal Service to increase rates by 2.15 percent on monopoly products such as stamps. Monopoly products generate the bulk of USPS profits. Increasing rates will only reduce revenue and further drive more consumers away from USPS products and services. 

Postal Service Governance Reform. The USPS Board of Governors is comprised of nine members, not including the Postmaster General and Deputy Postmaster General, who are Presidentially appointed and confirmed by the Senate and serve seven-year terms. Since 2015, the Board of Governors has had only one Governor serving due to congressional hurdles. H.R. 5714 would reduce the USPS Board of Governors from a nine-member board to a five-member board. This hollow reform does nothing to actually improve USPS governance, and instead reinforces the fact that most of the provisions in the bill are simply reforms for the sake of reforms, having no real impact on the status quo.     

We recognize the need for reforming the U.S. Postal Service. However Chairman Chaffetz’s Postal Service Reform Act ignores basic needed reforms to USPS, and instead increases rates, shifts USPS’s financial burden onto the American public, and allows for the diversion of resources away from the core mission of mail delivery.

It is for these reasons that we ask members of Congress to oppose this legislation.  


Grover G. Norquist                                       
Americans for Tax Reform                           

David Williams                                             
Taxpayers Protection Alliance                      

Jim Martin                                                     
60 Plus Association                                       

Phil Kerpen                                                  
American Commitment                                 

John M. Palatiello                                         
Business Coalition for Fair Competition

Norm Singleton                                            
Campaign for Liberty                                     

Andrew F. Quinlan                                                                                       
Center for Freedom and Prosperity  

Jeffrey L. Mazzella                                        
Center for Individual Freedom                       

Tom Schatz                                                   
Council for Citizens Against Government Waste 

Chuck Muth 
Citizen Outreach

Katie McAuliffe                                             
Digital Liberty                                               

Adam Brandon
Freedom Works

George C. Landrith
Frontiers of Freedom 

Mario Lopez
Hispanic Leadership Fund

Sabrina Schaeffer
Independent Women’s Forum

Andrew Langer
Institute for Liberty

Seton Motley
Less Government

Willes K. Lee
National Federation of Republican Assemblies 

Kevin Kosar
R Street Institute

Karen Kerrigan
Small Business & Entrepreneurship Council 

Ryan Alexander
Taxpayers for Common Sense

Judson Phillips
Tea Party Nation


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Study: Net-Metering Costs Non-Solar Customers $36 Million Annually

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Posted by Justin Sykes on Friday, August 26th, 2016, 10:16 AM PERMALINK

A new study released this month examined what, if any, benefits Nevada’s net-metering program produces for the state and residents. The study, conducted at the request of the Nevada Legislative Committee on Energy, focused on the cost-effectiveness of net metering and the impact of the program on ratepayers. The results of the study overwhelmingly showed Nevada’s net metering program amounts to all cost and no benefit for the state and residents.

Nevada has long been a focus point in the debate over net metering. In general, net metering programs require electric utilities to purchase excess electricity generated by customers with rooftop solar installations at the full retail rate, as opposed to wholesale. As a result, solar customers avoid paying many of the fixed costs of the grid that are factored into their monthly bills. As such, these fixed costs are then shifted onto non-solar customers.

As part of the study on Nevada’s net metering program, researchers looked at the impact the program has on Nevada ratepayers. The cost-shifting impact was undeniable. The study found a clear “cost-shift from NEM [solar] customers to non-participating customers for both existing installations and future installations.”

Nevada’s net metering program was shown to “shift approximately $36 million per year” in costs from existing solar customers onto non-solar customers. It was also found that future planned installations would shift an additional $15 million per year in costs onto non-solar customers. Thus non-solar customers are essentially subsidizing a portion of solar customer’s electric bills.   

Even more concerning is that the study found the state’s net metering program produces no benefit for the state as whole. Overall, net metering from existing and future planned solar generation systems “increase total energy costs for Nevada.” In fact, the program was even found to have no real benefit from the solar user perspective. 

Even when considering the “non-monetized benefits” of renewable generation the net-metering program still has little to no positive impact. Factoring in “externalities and non-monetized health benefits of reduced air emissions from self-generation, does not significantly change the results…for the costs and benefits” of net metering for Nevada overall. The study concludes, “There is no substantial net emissions reduction or additional health benefits attributable to NEM systems.”

Nevada’s net metering program is clearly all cost and no benefit. Not only does the program shift $36 million in costs annually onto non-solar customers, but also increases total energy costs for the state while having no impact on emissions or health.

As such, one can only wonder why Nevada, or any state for that matter, would continue net metering programs that quite literally have no beneficial impact on consumers or the environment, and instead serve only to burden residents and the state with higher energy costs.  


Photo credit:  Marufish

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Happy Bday Clean Power Plan, Thanks for the Job Losses and Billions in Costs!

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Posted by Justin Sykes on Wednesday, August 3rd, 2016, 12:53 PM PERMALINK

Today marks exactly one year since the Environmental Protection Agency (EPA) and Obama Administration formally unveiled their coveted Clean Power Plan (CPP). While EPA bureaucrats and the Obama Administration tout the so-called “benefits” of the CPP, the truth is the rule has already begun destroying the livelihoods of thousands of hard-working Americans even before enactment. With the rule turning one today, it is only fitting to reflect on the CPP's journey to this point since it was first proposed.  

In February of this year, the CPP suffered a major blow when the U.S. Supreme Court (SCOTUS) issued a stay of the rule, meaning that the Obama Administration and EPA may not continue with enactment until all legal challenges have played out. 

The SCOTUS ruling reinforced what CPP opponents have been arguing since the rule was proposed: that the CPP exemplifies federal overreach; would be disastrous for states and the U.S. economy; and is premised on backwards and illogical legal grounds. Even President Obama’s legal mentor, Harvard Law Professor Lawrence Tribe, has argued that the CPP “is a remarkable example of executive overreach and an administrative agency’s assertion of power beyond its statutory authority.”

Aside from the misleading and unlawful legal gymnastics the Obama Administration had to do just to propose the rule with a straight face, the CPP’s impact on the American economy is already being felt. Despite the fact that the CPP has not yet been enacted, in 2015 alone over 11,000 coal miners lost their jobs and a number of energy companies have filed for bankruptcy. Clearly Obama is comfortable with the state of things as long as his “green legacy” is preserved.

Even Democratic Presidential nominee Hillary Clinton has expressed her support for the CPP and its impact on jobs and the economy. At a Town Hall in Ohio in April Clinton proudly stated that she is the only candidate with a policy to bring renewables “into coal country, because we’re going to put a lot of coal miners and coal companies out of business.” Apparently Clinton is not up to date on the news because such policies are already devastating American workers.

On top of the economic extermination already taking place as a result of the CPP, the projected economic impacts if the rule is actually enacted are even more drastic. The rule is projected to cause a 12 to 17 percent increase in electricity prices. Every state in the continental U.S. will see rate increases, with an estimated 44 states seeing double-digit rate increases, and 17 states facing price increase of over 20 percent.

The CPP is also slated to decrease household spending power between $64 and $79 billion, with annual compliance costs projected to reach up to $73 billion. Such impacts are economically unsustainable for many businesses and families. Sadly, the low-to-middle income Americans President Obama has claimed will benefit from the CPP will actually be those hardest hit by reduced income, job losses, and higher energy costs.

Thus as the Clean Power Plan turns one year old today, Americans should thank President Obama and the EPA for birthing this tremendously disastrous and unlawful regulation. Americans can also thank the President and his EPA lackeys for the CPP’s contributions to the American economy: thousands of jobs lost; bankruptcy; reduced U.S. economic output and household income; and skyrocketing energy costs.

Happy Birthday Clean Power Plan! Hope it’s your last!


Photo credit: Steve Jurvetson

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Rep. Hensarling’s Financial CHOICE Act Reins in Dodd-Frank, Increases Consumer Protections

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Posted by Justin Sykes on Thursday, July 14th, 2016, 11:15 AM PERMALINK

House Financial Services Chairman Jeb Hensarling’s (R-Texas) recently introduced Financial CHOICE Act (FCA) looks to rein in a myriad of onerous and costly regulations enacted under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). In introducing the Act, Chairman Hensarling hopes to give Americans new ability to achieve financial independence and raise their standards of living, while also promoting economic growth for the economy as a whole.

Signed into law by President Obama in 2010, the Dodd-Frank Act was aimed at promoting financial stability in the U.S. However, since enactment Dodd-Frank has only increased financial instability, reduced consumer access while increasing costs, and burdened businesses with billions in compliance expenditures.

Dodd-Frank provisions such as the Durbin Amendment, Volcker Rule, and rules governing fiduciary duties lessen market liquidity and reduce access to financial products and services for millions of Americans. The creation of the Consumer Financial Protection Bureau (CFPB) under Dodd-Frank empowered a new wave of unelected bureaucrats to essentially outlaw financial products unilaterally.

Thankfully, Chairman Hensarling’s Financial CHOICE Act provides much needed relief for financial consumers and U.S. businesses that have suffered under Dodd-Frank. The Financial CHOICE Act contains a number of pro-growth and pro-consumer reforms aimed at lessening Dodd-Frank’s regulatory burden and economic impact.  

Some of the most needed reforms under the Financial CHOICE Act are provisions reining in the CFPB.  For years the CFPB has been able to unilaterally ban certain financial services and products it deems “abusive” and has been able to collect personally identifiable information on consumers at will. The CFPB is also not subject to the appropriations process, leaving Congress with little oversight over the Bureau’s actions.

The Financial CHOICE Act would repeal the CFPB’s authority to ban bank products and services it deems “abusive” as well as requiring the Bureau to obtain permission before collecting personal information from consumers. The Act would also repeal the CFPB’s authority to prohibit arbitration, and would replace the current director with a five-member commission subject to congressional oversight and appropriations.

With regard to financial consumers, the Financial CHOICE Act would repeal price controls and regulations under Dodd-Frank’s Durbin Amendment that were imposed on debit card transaction fees. The premise of the Durbin Amendment was that the savings from regulated fees would be passed onto consumers, however studies show consumers have actually lost access to free checking and debit card rewards as a result.

The Financial CHOICE Act would also hold financial regulators accountable by requiring that financial regulations pass a cost-benefit analysis before enactment and that “major” regulations be passed by Congress instead of unilaterally by unelected bureaucrats. 

Other pro-growth and pro-consumer reforms to Dodd-Frank contained in the Financial CHOICE Act include:

  • Repealing the Volcker Rule’s restrictions on proprietary trading;
  • Replacing “Orderly Liquidation Authority” which allows the bailout of financial institutions at the expense of taxpayers;
  • Repealing the authority of the Financial Stability Oversight Council (FSOC) to designate firms as systematically important institutions (SIFIs);
  • Repeal the CFPB’s indirect auto lending guidance; and
  • Make all financial regulatory agencies subject to the REINS Act.


These and a number of other reforms contained in the Financial CHOICE Act will be a positive step to reining in costly regulations under Dodd-Frank and ensuring regulators are held accountable.

Overall, Chairman Hensarling’s Financial CHOICE Act will increase financial opportunities and protections for all Americans, end taxpayer funded bailouts, and encourage economic growth through competition, transparency, and innovation. 


Photo credit: Gage Skidmore

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