Today marks one year since the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was signed into law. One year since Rep. Barney Frank (D-MA) and former Senator Chris Dodd (R-CT) chose to ignore our concerns that this bill would stifle the recovery, harm job creation and crush Main Street America. One year since the former Speaker Pelosi- and Leader Reid-controlled Congress rammed this bill through the House and Senate with almost no Republican support, unleashing a tidal wave of new regulations on an economy already buckling under overregulation.
Unfortunately, one year later, the promises that this legislation would help restore our fiscal stability and confidence and grow our economy remain largely unfulfilled and many of our worst fears have come true.
The few effective provisions of Dodd-Frank are masked by its many flaws; flaws that have been and will continue to be detrimental to the American economy and our financial future if not reversed. As Chairman of the House Committee on Small Business, I am particularly concerned about the impact these flaws will have on small firms across America. Small companies are the cornerstone of the American economy and are our most effective job creators. On average, seven of every ten new jobs are created by small businesses.
The impact of Dodd-Frank on small businesses is two-fold. First, Dodd-Frank is having a tremendous impact on small business lending. In the last few years, lending to small firms has plummeted to record lows. The stricter regulatory environment created by Dodd-Frank, and the new Consumer Financial Protection Bureau (CFPB), combined with the uncertainty brought by many of the laws’ vague provisions, is slowing small business lending. Access to capital is critical for small business success and crucial to our economic recovery. Without access to capital, many small companies are not able to maintain operations, let alone expand and create new jobs. With unemployment hovering at over 9 percent we should be doing more to make credit available to our job creators, not stifling lending with new regulations.