Fifth Anniversary of Dodd-Frank Act

Floor Speech

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Mr. SCHWEIKERT. One of the most painful things, Mr. Chairman, when I first got elected, I was blessed to be on the Financial Services Committee, and I spent that summer trying to read every word of the Dodd-Frank legislation.

What you learn is, even reading the legislation, you don't understand all it is going to do because it refers to this agency will make this rule set, this regulator will create this rule set--you start to realize that 2,300 pages is taller than I am--and it is still coming.

Mr. Chairman, what percentage of the rule set is finished so far?

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Mr. SCHWEIKERT. I know Chairman HUIZENGA has actually taken a look at some of these things.

One of the other aspects that almost never gets discussed is that innovation is almost gone, the opportunity for what the next world is going to look like.

Think of this, when Apple Pay comes from a technology company and not one of our banking companies, you have got to understand what this law has done. It has basically stifled economic growth, but it has also stifled the very innovation that made our financial markets one of our engines of growth.

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Mr. SCHWEIKERT. Let's face it. There is a wonderful irony here. The system has great stress; horrible things happened. Let's turn to the very

regulators who were in charge at that time and say: Let's double down with them.

Instead of taking a step backwards and understanding we live in the time of information and technology, where we could have used that sunshine to see into our markets, instead, we basically created a command and control regulatory system and handed it back to the same folks who screwed it up in the first place.

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Mr. SCHWEIKERT. Well, think about this: How much reform has truly happened at Fannie and Freddie? Where are we at right now? I know the apologists on the left go out of their way to say don't blame the GSEs and their concentration risk and the cascade and the markets they built in subprime paper and don't blame the regulators who are supposed to be watching them.

Here we are, 5 years later, and in many ways, the folks who soaked themselves in gasoline are still there.

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Mr. SCHWEIKERT. Thank you for the yield, Mr. Chairman.

You actually just hit on one of the wonderful ironies and one of the great difficulties we have in our discussions in our own committee.

First off, the regulation, the way Dodd-Frank is designed, it is designed for the last problem. It is not forward-looking of what the future looks like. And then there is always the arrogance here in Washington of thinking we know what the future looks like.

But there is also a number of professionals in the industry and academia who are now writing about what they call concentration risks. What happens when you tell every bank that they can only hold certain assets? You now have a concentration risk. If something goes wrong in that asset category, the cascade effect is universal. This is now happening up and down our financial system.

In many ways, I can make you a powerful argument that the post-Dodd-Frank world is creating a banking system that ultimately is more fragile because of a contagion concentration risk.

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