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Congressman Adrian Smith

Representing the 3rd District of Nebraska


Rolling Back Excessive Regulations

June 11, 2018

As your representative, I have fought to reduce burdensome and unnecessary government regulations which disincentivize entrepreneurship and strangle economic growth. In fact, regulatory issues were such a concern under the Obama administration, I consolidated my efforts under a program entitled Regulation Rewind. While the economic crisis of 2008 was a terrible event which none of us would hope to see repeated, the response under President Obama’s administration was to enact the most sweeping financial regulatory package of all time.

The Dodd-Frank Wall Street Reform and Consumer Protection Act created regulations that even to this day, nearly eight years later, have yet to be implemented due to their complicated and virtually unenforceable nature. Many of these regulations are economically dangerous and had nothing to do with the financial crisis. Dodd-Frank is a bona fide case study into the unintended consequences and collateral damage resulting from ill-considered and overreaching legislation.

The American people had every right to be outraged when the subprime mortgage crisis, in addition to other factors, brought on a deep recession whose economic effects we are only now overcoming. However, the founders were clear about the purpose behind our nation becoming a republic as opposed to a pure democracy, which can so often result in mob rule and thereby bad decisions. Simply put, we empower elected officials to act on our behalf in order to smooth out the wax and wane of public opinion between elections.

These are the reasons I co-sponsored the Financial CHOICE Act, which passed the House in June 2017. This bill would have rolled back burdensome financial regulations which have encumbered economic growth and created a culture in which banks are considered “systemically important,” or too-big-to-fail, and put the American taxpayer on the hook for bailing them out. This set a dangerous precedent in the way of a moral hazard which could encourage excessively risky behavior in knowing one’s actions have no consequences.

While the Senate has yet to take up the CHOICE Act for floor consideration, President Trump signed into law a smaller package of financial regulatory reforms in May 2018. The Economic Growth, Regulatory Relief, and Consumer Protection Act includes a total of fifty-three provisions which provide targeted regulatory relief for community financial institutions, while increasing certain consumer, veteran and investor protections and seeking to foster economic growth. I am proud to say over half of these provisions were originally introduced in the House of Representatives and debated in our committees prior to being included in the Senate bill.

Overall, this law is a step in the right direction, especially because many of our friends across the aisle have been reticent to modify what they consider a marquee achievement of the Obama administration, much like Obamacare. These reforms are beneficial to Nebraska’s citizens, small banks, and financial institutions, and I was happy to vote for it. Reducing regulation is good for our economy and the vibrancy of our business sector.