Letter from Grover NorquistAmericans for Tax Reform,
On behalf of Americans for Tax Reform (ATR), I strongly urge you to oppose Sen. Dodd’s (D-C.T.) Restoring American Financial Stability Act of 2010. The Committee-passed legislation has several contentious elements, but perhaps most egregious is the creation of a Bureau of Consumer Financial Protection (CFPB). This new autonomous agency will be sheltered within the Federal Reserve, insulating its’ decision making from the established traditional regulatory framework.
The establishment of the CFPB virtually guarantees conflict with other regulators focused on the safety and soundness of financial markets. The CFPB will do little more than restrict consumer options while increasing costs.
Additionally, Sen. Dodd’s bill creates a powerful Financial Stability Oversight Council (FSOC), made up of nine existing agencies, with power to “draft” financial institutions into a regulatory structure. Once institutions are forced into this structure, the FSOC can regulate the products or services they sell or provide, order them to break-up or simply shut down. The FSOC would be given almost unlimited regulatory power. The FSOC would collect data through another newly established agency within the Treasury, the Office of Financial Research and their “Data Center” which is tasked with determining financial company’s contributions to the financial stability of the United States.
Further, a $50 billion Orderly Liquidation Fund will be established, the FDIC will have authority to tap, and the Fund will have privilege to borrow unlimitedly from the Treasury. This fund is nothing more than a permanent, unlimited TARP program that will be used to bailout politically important financial institutions. The cost of this Liquidation Fund will be paid for by financial firms with assets over $50 billion. However, the real cost of this will be passed on to American consumers.
Our free market system was built on risks. This choice allows citizens to risk little and play it safe, or risk a lot in hopes of winning big. By over-regulating, Sen. Dodd’s bill attempts to control the entire financial sector and completely absolve citizens of personal responsibility, and the freedom to make decisions.
Do not be fooled by Sen. Dodd’s claims that he proposal is “reform:” The establishment of hidden, sheltered regulatory agencies, increased red tape and a permanent, unlimited bailout in form of a “Liquidation Fund” are not reform, they’re restrictions.
For more information, contact Federal Affairs Manager Brian Johnson at [email protected] or 202.785.0266 in my office.
Grover G. Norquist