GOP chairman vows to lift 'yoke of Dodd-Frank' from credit unions

House Financial Services Committee Chairman Jeb Hensarling pledged Tuesday to use his gavel to push back against a flurry of Dodd-Frank Act regulations he warned would stifle the nation’s financial sector.

Speaking to the National Association of Federal Credit Unions annual conference, Hensarling said the sweeping financial reform bill was responsible for two kinds of regulations: “those that create uncertainty and those that create certain economic harm.”

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“If I had the votes today, I would repeal Dodd-Frank,” the Texas Republican said, drawing applause from scores of credit union operators gathered at the Mayflower Hotel. “I want to take the yoke of Dodd-Frank from your back.” 

The Wall Street reform law, enacted in response to the 2008 economic crisis, requires hundreds of rules meant to avert a repeat debacle.

Credit unions and community banks have complained that the law does not sufficiently distinguish between them and the big Wall Street financial institutions blamed for the crisis. They say they are being unfairly penalized by the new rules.

Rep. Maxine Waters (D-Calif.), the top Democrat on the Financial Services panel, noted to the conference that Dodd-Frank provisions ensured credit unions have a seat at the table during discussions of rules mandated by the law. For instance, she noted the National Credit Union Administration was given a vote on the interagency Financial Stability Oversight Council, created by Dodd-Frank.

But Hensarling and other GOP lawmakers appearing at the conference focused their ire at another agency spawned by the financial reform law: the Consumer Financial Protection Bureau (CFPB).

Republicans have relentlessly criticized the CFPB’s structure because it is not subject to the congressional appropriations process and it is led by a single director, rather than a commission or board.

“I do not know in the history of our country that there has ever been another agency that has been more powerful and less accountable than the CFPB,” Hensarling said.

Arguing that CFPB Director Richard Cordray has the unprecedented authority to outlaw any financial product he doesn’t like, Hensarling said he had designated Tuesdays to focusing the committee’s work on oversight of the agency.

Waters countered that the CFPB has been at the forefront of efforts to ensure credit unions are not unfairly impacted by the new regulations and said the 2-year-old agency is gaining a reputation for being responsive to community-level concerns.

“I believe that the CFPB is appropriately tailoring its rule-making so that the smallest credit unions are not disproportionately burdened by the changes,” Waters said.