House Speaker Paul Ryan (R-Wis.) and House Republicans this week released their third policy blueprint. The proposal calls for overhauling the regulatory system and lays out a number of financial solutions to help all Americans better obtain financial independence. Over the past seven years, unelected bureaucrats have run rampant over, making unilateral decisions over products and services one better left up to consumers and investors.
Speaker Ryan blueprints many problems, and also proposes commonsense, conservative solutions to halt the Obama takeover of basic financial services. Most importantly, these solutions all ensure that decision-making power is placed back with American families and small businesses.
Obamacare for your retirement
The Department of Labor recently released the “fiduciary rule,” a regulation that will clamp down on the financial advice available to 401(k) and IRA users. The 1000+ page rule creates a “best interest” standard that is so broad and lack clarity that they are open to wide interpretation. Some economists have even warned the standard is an “open-ended obligation with seemingly no bounds.” This rule is projected to leave up to 7 million IRA holders being unable to receive investment advice, and 300,000 to 400,000 fewer IRAs being opened yearly.
To address the fiduciary rule, the blueprint calls for securing American’s retirement and investment choices, as well as censuring the DoL’s fiduciary rule and to directing the SEC to regulate this area as it is required to under federal law. These measures will put American families and small businesses back in charge of making their retirement decisions and reel in Obama’s executive overreach.
Lack of consumer choice
The Dodd-Frank Act has eliminated consumer choice and empowered regulators broad authority to control consumer behavior. Since the passage of the legislation, the number of banks offering free checking has dropped from 75 to 39 percent. Additionally, the law created the Consumer Financial Protection Bureau (CFPB), which has the authority to outlaw a product or service if the director finds it “unfair” or “abusive”.
The proposal recommends reforming the CFBP in three ways. First, turn the CFPB into a five member, bipartisan stand-alone agency. Second, create and institute an Inspector General for the CFBP. Third, bring transparency and accountability to the CFBP by creating a budget and restoring congressional oversight, so that money is not squandered by this unregulated agency. These are important reforms to restore consumer choice and not allow the Obama administration to inefficiently and unfairly act.
Credit unions and small banks are being phased out
Dodd-Frank has also squeezed credit unions and brought on roughly $2.8 billion in regulatory compliance costs. Inevitably, these costs are passed onto the consumer through higher prices or diminished credit availability. Today, credit unions are forced to dedicate one in every four employees to comply with mind-numbing regulations.
To stop banks and credit unions from being squeezed out, the GOP blueprint proposes providing immediate relief to the community banks and credit unions. It suggests enabling regulators to tailor regulations to align with the size and business model of a bank or credit union and raising the consolidated assets threshold to allow more small banks to access capital for new loan products and making loans. Both of these solutions will help small businesses regain control from the dictatorial regulations and executive overreach.