Raising Consolidated Assets Threshold Under Small Bank Holding Company Policy Statement

Floor Speech

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Mr. SCHWEIKERT. Mr. Speaker, I thank the chairman and, also, my good friend Congresswoman Love. She actually has become a very valuable member of the Financial Services Committee.

I appreciate this bill. We have to talk through something because there is something here that is just bordering on--you know, we are passing each other in the night here. That makes absolutely no sense.

Dodd-Frank: I accept some folks bathe in love for it, but it has made the big, money-center banks bigger. So a bill comes along that says there is this concentration--if you believe it is a concentration of risk--because these banks are growing bigger and bigger and bigger. And one of the big reasons they are growing bigger is because they can amortize the regulatory risk over a much bigger book of business.

The money-center banks are $2 trillion institutions. We are talking about a $5 billion step-up here. The small banks, which we are losing one a day, cannot cover these costs. Their regulatory costs on a much smaller book of business is putting them out of that business.

So if you want to make the big banks smaller, you can try to regulate them more. But they have demonstrated that actually is their competitive edge in the world right now. What you need to do is compete them out of their hugeness, if that is a word.

If you care about competition, if you want to stay with your rhetoric that, hey, we need to deal with these big banks and we need to keep regulating them, then create a market where other banks can start to take parts of their market share because the big banks have a different cost of money.

They have this ability to take this huge regulatory environment-- sometimes five different agencies that have some level of prudential coverage--and amortize it over a book that is $2 trillion.

How about giving smaller institutions a chance to start taking some of their market share? That is what Mrs. Love's bill does.

It starts to say--and we are still talking something that is tiny in the banking world--let these holding companies get up to $5 billion. Let them actually start having a fighting chance to take some of this regulatory burden that has been shoved down their throats and start to amortize it over a little bit larger book. Because if you leave it at the smaller institutions, they cannot compete.

If you want to make the big banks smaller, create an environment where they face competition. This is a classic argument around here. Do you believe that you make the world safer by layer and layer and layer of regulation? Well, that worked great in 2008, didn't it?

We are going to file our paperwork and maybe next quarter some regulator will look at it and maybe the next 6 months someone will write a letter about it. Or do you want an environment where there is so much competition out there that there is lots of optionality in the financial markets? That is what we are looking for here.

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Mr. SCHWEIKERT. Mr. Speaker, it is a fairly simple argument. If you want a competitive, robust financial market in our banking world, where institutions have the ability to survive because of the crushing costs that Dodd-Frank has created. This is a simple, simple bill. It is just a chip off the iceberg that is Dodd-Frank.

Think about it in a way that this is the first step to try to create more competition to those big banks that I hear the left rail on day after day. This is a good piece of legislation.

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