By: Flynn H.C.R. No. 94
HOUSE CONCURRENT RESOLUTION
WHEREAS, the banking and insurance communities are essential
to the continued growth and well being of the State of Texas. Were
and still are essential to the development of Texas, serving as
important hubs of economic activity for communities all across the
state; the Dodd-Frank is destructive to the State of Texas and the
citizens within and a constant threat to businesses; and
WHEREAS, The Dodd-Frank Wall Street Reform and Consumer
Protection Act was passed by the United States Congress on July 21st
of 2010. It consists of 2,300 pages of new statutory language that
will result in the promulgation of over 250 new federal
regulations. Supporters of the legislation claim that it will equip
federal regulators with powers to prevent another financial debacle
like the country experienced from 2007 through 2009. In reality,
the bill sets up a regulatory regime that allows "Too Big to Fail"
banks and Wall Street to continue to avoid adequate scrutiny while
it punishes traditional Texas banks that had nothing to do with the
most recent crisis; and
WHEREAS, A new Bureau of Consumer Financial Protection is
established to regulate all consumer financial services in the
United States. It will receive hundreds of millions of dollars in
funding annually from the Federal Reserve System and is not subject
to Congressional oversight through the appropriations process. The
Bureau will have the power to regulate what types of financial
products can be provided and which products cannot be offered. It
will have the power to set prices for consumer loans, mortgages and
small business loans. If this new agency were to become what its
advocates have envisioned it will be at least as large as the
Internal Revenue Service. Texas banks will have fewer and more
expensive products to offer to their customers. The credit needs of
rural and urban Texans will be determined by an agency in
Washington; and
WHEREAS, The Bureau of Consumer Financial Protection will
also greatly increase compliance costs for Texas community banks.
Smaller banks will see their compliance and employee costs increase
by tens of thousands of dollars on an annual basis. This will result
in millions of dollars in loans that will not be loaned in their
communities. Further, these new costs will drive down profitability
and lead to the consolidation of the banking industry. Fewer banks
mean less credit and fewer choices for borrowers across the state;
and
WHEREAS, Even before the effective date of the Dodd-Frank
Act, federal bank regulators have been examining banks and imposing
sanctions that are harming credit availability all over Texas. In
the name of consumer protection and fair lending the federal
agencies are curtailing services, such as overdraft protection,
that are wanted by Texas bank customers. The limitation on bank
service fees will increase costs for all consumer services and lead
to the end of offerings such as free checking. During fair lending
examinations banks are being told that discrepancies of a few cents
in the charging of interest rates can lead to referrals to the U.S.
Department of Justice. This has led to a chilling effect and a
reluctance by community banks to make small consumer and business
loans; and
WHEREAS, Another example of federal intervention in the
pricing of financial products are the rate caps placed on
interchange fees for debit cards. The Dodd-Frank Act takes the
pricing of these services from the marketplace and places it in the
hands of the Federal Reserve. The most recent proposal from the
Federal Reserve would so severely restrict interchange fees that
banks and credit unions will be unable to cover the full costs
associated with providing checking accounts and debit cards. As a
result, banks and credit unions will be forced to cease offering
debit and checking products and increase fees to their retail
customers for checking accounts, debit cards and other retail
services. Lower income Texans who have obtained greater access to
affordable retail banking, partly because of interchange fees, will
have less access to traditional institutions and be forced to go
back to the less regulated "shadow" banking system with its
increased costs now, therefore, be it
RESOLVED, That the 82nd Legislature of the State of Texas
hereby urge The United States Congress to repeal this destructive
law.