Economic Growth, Regulatory Relief, and Consumer Protection Act--Motion to Proceed

Floor Speech

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Mrs. CAPITO. Mr. President, I come to the floor today to talk about the bill we have in front of us, the Economic Growth, Regulatory Relief, and Consumer Protection Act. That is a mouthful right there, but what it is, is a culmination and reaction to the Dodd-Frank bill that was passed in 2010 as a result of the crisis of 2008 and 2009.

I think it is important for us to note where this is directed. In Dodd-Frank, so much of the focus was placed on large banks and larger institutions, but what has been lost in the debate and what really is an unintended consequence, I think, is that the massive and burdensome regulatory legislation would affect the smaller banks, the community banks, and the credit unions.

Senator Rounds of South Dakota and Senator Blunt of Missouri and my State of West Virginia have more rural areas for the most part, and these community banks and credit unions are absolutely critical to our individuals but also to our businesses. They have been bearing the brunt of Washington's response to that in the form of Dodd-Frank.

We know that larger financial institutions have the capital, resources, staff, and expertise to handle a lot of these regulatory requirements that are placed on them, but smaller institutions have really struggled under the weight of Dodd-Frank. We didn't come to this point today without a lot of discussion, compromise, and thoughtful input from a lot of different entities to figure out the best way to serve all our States. These smaller institutions play a critical role in a State like West Virginia. Our small businesses rely on them to open and succeed, our communities rely on them to expand, and our economy relies on them to grow, especially in our rural areas.

Our community banks and credit unions really had to shift their attention away from what they know best, which is relationship-based lending and borrowing, and put it more into this regulatory environment to devote bank resources, time, energy, effort, and legal resources to make sure they are complying with regulations that were really intended for larger financial institutions. It has been tough.

From 2010, which was the year Dodd-Frank was enacted, until 2016, the number of community banks in our country has decreased by 1,600. That is a significant decrease in the number of community banks. With little or no access to community banks, our Main Street borrowers have been forced to turn to larger institutions for loans. That is fine, but a lot of times our Main Street businesses and individuals get lost in the shuffle. Sometimes it is stiffer terms, and sometimes it could mean rejection.

We are talking about farmers, families looking to buy a home, and of course our small businesses. We are really talking about the hard- working men and women trying to live that American dream.

With smaller institutions constantly forced to merge with larger ones to help shoulder the cost of regulation, that relationship-based model that has served our communities for decades is disappearing.

I think it is time now, after much thought, to ease that burden and rightsize those regulations on our smaller financial institutions, and that is exactly what the Economic Growth, Regulatory Relief, and Consumer Protection Act does. It is a balanced approach to regulation. It takes into account the differences--some of them vast differences-- between larger and smaller financial institutions.

It improves access to mortgages, which is something I have been interested in since my service in the House when I was on Financial Services and I chaired the Financial Institutions Subcommittee. The mortgage issue was something that I introduced, and we worked on many, many pieces of legislation to provide rural areas with greater access to mortgages.

Let's just talk about what happens. If a young couple is trying to get a mortgage or maybe it is even a med student coming out of medical school, trying to get a mortgage for a loan with no real income yet but in a relationship banking situation, that small community banker knows that is going to be a safe bet at the end of the day. A lot of our mortgages have been so constructed by Dodd-Frank that people haven't been able to get mortgages. Let's face it. The ones who face the biggest challenges are the ones we were supposed to be trying to help with Dodd-Frank, and those were in the mid to lower income range who maybe had a credit issue or some other extraneous issue. In a cookie- cutter environment, one-size-fits-all doesn't fit their size, and they end up without the opportunity to own a home.

There are also very critical consumer protections in this bill-- protections for our seniors. I am going to go out on a limb here and say that this is probably one area in which we haven't, as a Congress, joined together with financial institutions and other consumer advocates to protect our seniors from being preyed upon financially. It is rampant. Sometimes you are preyed upon by your own family. So the Senior Safe Act, which is Senator Collins and Senator McCaskill's bill, protects our seniors from financial exploitation--this is part of the bill--and fraud. This has been a consistent priority of mine.

It also works to protect our veterans, who can be very vulnerable when seeking financial assistance, and also for individuals who have gone through tough times financially. The legislation clarifies a lot of the CFPB regulations to help benefit those consumers.

Student borrowers and student loans--we talk a lot about the increasing debt that our students are incurring, the difficulty that students, after they graduate, have in paying down these debts, but a bill that I helped to introduce with Senator Peters is included in this agreement. It says that when student borrowers from private loans have the opportunity, they can rehabilitate their credit following a default. They can't do that now. If you have a government loan, you can do that, but if you have a student loan through a private institution, you can't do that. So we are seeking parity between a government loan and a private loan, and we think this will help those students repay and relook at their finances.

Finally, in light of recent data breaches that have put many at risk, this legislation puts in place important cyber security standards and safeguards. Every committee we are on talks about cyber security. The financial institutions, I think, have been on the leading edge of trying to detect cyber invasions into information or into their financial institutions. We have to stay one step ahead here because this is very fast-moving.

These are all priorities and solutions on which I have worked hard, both as a leader on the House Financial Services Committee and now, as I chair the Financial Services and General Government Appropriations Subcommittee.

For community financial institutions, regulatory relief and economic growth go hand in hand. We just passed the tax relief bill, and a lot of our small businesses are able to increase their bottom lines, grow their businesses, grow jobs and wages. We want to see those financial institutions grow alongside that.

Working men and women and small business owners deserve a fair shot at mortgages. Owning a home is the American Dream. They also deserve a process that takes into consideration the kind of community where they live.

We deserve relief from these burdensome and unbalanced regulations we have been forced to contend with for too long. The Economic Growth, Regulatory Relief, and Consumer Protection Act does just this. It gives us an opportunity to send a clear message to Main Street, and that is: We support you. We support you.

I encourage all of my colleagues to stand with me. I want to thank Chairman Crapo for his dedicated insistence that this come to the floor of the U.S. Senate and that we have bipartisan support. It is very well thought-out. It doesn't have the whole kitchen sink in it. It has the provisions that I think are the top priority for our financial institutions but also for all of us who represent Main Street here in the U.S. Senate.

Thank you.

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