Real conservatives are still offering great ideas

While the focus is on the despair-inducing, pathetic 2016 presidential race, pro-freedom legislators are still donning their thinking caps and coming up with solutions to vexing problems:

Rep. Jeb Hensarling (R., Texas), the chairman of the House Financial Services Committee, has introduced new legislation called the Financial CHOICE Act that would repeal and replace the Dodd-Frank Act.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was signed into law by President Obama after the financial crisis of 2008 to “promote the financial stability of the United States by improving accountability and transparency in the financial system” and put an end to “too big to fail” banks.

The Financial CHOICE Act, which stands for Creating Hope and Opportunity for Investors, Consumers, and Entrepreneurs, would eliminate taxpayer-funded bailouts and relieve financial institutions from regulations.

While supporters of Dodd-Frank blame deregulation for the financial crisis, Hensarling said that financial regulation actually increased in the decade leading up to the financial crisis.

“Regulatory restrictions on financial services grew every year between 1999 and 2008,” Hensarling said. “Financial services was, and remains, one of the heaviest regulated industries in the economy.”

“The Republicans’ better approach will relieve financial institutions from regulations that create more burden than benefit in exchange for meeting higher, yet simple, capital requirements,” he said. “Our reform plan allows banks to opt in to an alternative regime that replaces growth-strangling regulation with reliable accountability. It stops investors from betting with taxpayer money.”

“Banks will opt in to the Republican plan’s new regime only if it makes them more competitive—in other words, if it lets them better serve customers at a lower cost,” he said.

Hensarling’s plan would end “too big to fail” by replacing Dodd-Frank’s Orderly Liquidation Authority, which allows government bureaucrats to favor some creditors over others, with the Financial Institution Bankruptcy Act, which creates a new subchapter of the bankruptcy code to address large financial institutions that have failed.

Another component of Hensarling’s plan is to ensure that every financial regulation passes a cost-benefit analysis so that stakeholders know how the rule will impact economic growth before it takes effect. The REINS Act, which stands for Regulations from the Executive in Need of Scrutiny, would require that all major financial regulations be approved by Congress before taking effect.

The plan would also toughen penalties on bad actors at financial institutions.

“The Financial CHOICE Act will impose the toughest penalties in history for financial fraud, self-dealing, and deception,” Hensarling said.

The plan intends to increase capital formation and entrepreneurship by repealing the Volcker Rule, which prohibits banks from engaging in proprietary trading investments for their own trading accounts.

“Of the roughly 450 financial institutions that failed during or as a result of the crisis, not a single one failed because of proprietary trading,” Hensarling says. “In fact, financial institutions which varied their revenue stream were better able to weather the storm, continue lending, and support jobs.”

Of course, Josh Earnest and the Most Equal Comrade give it the big thumbs-down.