83R1156 BPG-D
By: Flynn, Keffer, Taylor, Creighton, H.C.R. No. 26
Bonnen of Brazoria, et al.
CONCURRENT RESOLUTION
WHEREAS, The banking and insurance industries are essential
to the continued growth and well-being of Texas, serving as
important hubs of economic activity for communities throughout the
state; the Dodd-Frank Wall Street Reform and Consumer Protection
Act not only poses a major threat to these businesses, but will
serve as a destructive influence on the entire state; and
WHEREAS, The Dodd-Frank Act, which was passed by the United
States Congress on July 21, 2010, consists of 2,300 pages of new
statutory language and increases the size of the federal government
by creating 13 new regulatory agencies; 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, but 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 recent
crisis; and
WHEREAS, Established to regulate all consumer financial
services in the United States, the new Consumer Financial
Protection Bureau will receive hundreds of millions of dollars in
annual funding from the Federal Reserve System and is not subject to
congressional oversight through the appropriations process; it has
been granted the power to decide what types of financial products
can and cannot be offered, as well as the power to set prices for
consumer loans, mortgages, and small business loans; and
WHEREAS, If this new agency becomes 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, and the credit needs of rural and urban
Texans will be determined by an agency in Washington; and
WHEREAS, The Consumer Financial Protection Bureau 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, resulting in
millions of dollars in loans lost to area communities; furthermore,
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 began examining banks and imposing
sanctions that have harmed credit availability all over Texas; in
the name of consumer protection and fair lending, the federal
agencies have curtailed 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 is 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; severe restrictions on interchange
fees could leave banks and credit unions unable to cover the full
costs associated with providing checking accounts and debit cards
and force them to cease offering some debit and checking products
and to increase fees on those they continue to provide; lower income
Texans who have obtained greater access to affordable retail
banking, partly because of interchange fees, would 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 83rd Legislature of the State of Texas
hereby respectfully urge the Congress of the United States to
repeal the Dodd-Frank Wall Street Reform and Consumer Protection
Act; and, be it further
RESOLVED, That the Texas secretary of state forward official
copies of this resolution to the president of the United States, to
the president of the Senate and the speaker of the House of
Representatives of the United States Congress, and to all the
members of the Texas delegation to Congress with the request that
this resolution be entered in the Congressional Record as a
memorial to the Congress of the United States of America.