6 JULY / AUGUST 2017 Its full name is the Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs Act, but it’s better known as the Financial CHOICE Act. This Act is designed to bring much-needed relief to the U.S. financial services landscape by reducing regulatory overreach and by increasing accountability. The Financial CHOICE Act passed the U.S. House of Representatives on June 8 by a vote of 233 to 186. The industry hailed this first step to law as a victory, while many consumer groups expressed fear of returning to the conditions that ushered in the financial crisis of 2008. For a piece of legislation that is widely talked about, ironically the Financial CHOICE Act is not well understood. A lengthy document – some 600 pages long – the entirety of the Act has been read by few, misinterpreted by many. Misinterpretation has spawned several false beliefs, namely that the Act will deregulate the financial services industry to the point of undermining safety and stability. In starkest terms, it is portrayed by opponents as “pro-business” and “anti-consumer” … as if the needs of both are mutually exclusive. First, when will we stop dividing the world into two camps, consumers vs. businesses? When can we finally appreciate that the two are interdependent, with consumers benefiting from a strong economy, and businesses reliant on the consumers they serve? Second, let’s look again at the full name of the Act: “Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs.” More than a catchphrase, this name inventories who would benefit from its passage. Not just investors, not just entrepreneurs, but consumers would benefit. How? The Financial CHOICE Act streamlines financial services by reducing overregulation in a multitude of areas, such as mortgage lending, call reports and data collection, to name a few. Bear in mind that since the 2010 enactment of the DoddFrank Act – the single largest piece of banking legislation in U.S. history – the industry has spent billions of dollars scrambling to comply. Dodd-Frank was sold to the public as an antidote to the financial crisis, but instead it has strained banks’ ability to stay in business and raised costs for everyone engaged in the banking process, including consumers. Yet because of the false sense of security DFA provides, the prospect of rolling it back is hyped into a rallying cry against the Financial CHOICE Act. Which is a shame, because the Act would bring additional benefits to consumers. One is that it Amber R. Van Til President and CEO Indiana Bankers Association avantil@indianabankers.org @grbanker VANTAGE VIEWPOINTS would bring transparency to the regulatory process. As an example, post DFA, the Federal Reserve was granted substantial new powers, but was not required to meet proportional accountability requirements as a check against those powers. The Financial CHOICE Act would retain the Fed’s independence, but also would require audits of all operations, keeping the Fed accountable to the public it serves. Another consumer benefit of the Act is that it would bolster free-market choices, hence the CHOICE acronym. “Free market” is a key phrase, because it’s the crux of misperception about industry views on regulation. Some groups that oppose the Financial CHOICE Act wrongfully depict banking as being anti-regulation. In actuality, the banking industry welcomes appropriate regulation, because right-sized regulation helps keep the industry safe and secure. Additionally, banking advocates understand that the absence of regulation would permit monopolies to form, which would negate the benefits of free market economics. Appropriate regulation is essential. What the banking industry opposes is overkill. Too much regulation crimps processes and raises costs, resulting in added expense to consumers. Excessive regulation can even force smaller operations out of business, leaving consumers with fewer financial choices. It remains to be seen what the fate of the Financial CHOICE Act will be. The omnibus bill is not going to be heard in the Senate, but we may be reaching out to you, our grassroots bankers, to advocate in favor, as smaller bills portions of the Act are considered. Because this topic has taken on a divisive rhetoric, you can help by talking to friends, family, customers, people in the community and others who know you and respect you. Explain that the Act isn’t “us vs. them.” Instead it’s for all of us, working together toward a shared goal of “Creating Hope and Opportunity.” HB
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