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Urging the United States Congress to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act.
HCR 26 would urge the Congress of the United States to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act on behalf of the 84th Legislature of the State of Texas.
The Dodd-Frank Act was passed on the heels of the 2008 financial crisis. Thus, the conception of this 2,300 page behemoth arrived during a tumultuous period. As HCR 26 points out, the Dodd-Frank Act was implemented with the hopes of curtailing another financial crisis; it does this by creating 13 new regulatory agencies.
Unfortunately, the underlying premise of the Dodd-Frank Act is that the housing crash was the fault of the mortgage lenders. Although these mortgage lenders did play a role in the housing crash, this Act fails to acknowledge the role that government policies played in incentivizing certain decisions that were made by lenders and borrowers. In other words, the Dodd-Frank Act operates under the false assumption that more government regulations will fix a problem partly caused by government regulations.
HCR 26 says that the new Dodd-Frank regulations will ultimately harm local Texas banks by limiting the products they offer, which will inevitably raise the costs of those products; this in turn will hurt Texas citizens who will find it increasingly difficult to obtain lines of credit. Already some of these regulations have had a “chilling effect” on loans provided by banks because the overly strict laws could easily lead to a referral to the U.S. Department of Justice.
The irony of so many well-intentioned government regulations are that they ultimately harm the consumers they claim to protect. The Dodd-Frank Act is a perfect example of this irony. It is always imperative to look at the consequences of a policy and not its intentions. Unfortunately, the consequences of the Dodd-Frank Act are contrary to its intentions.
We support HCR 26 because it would comport with all five of our liberty principles.