The CHOICE Act: Prosperity Wins, Cronyism Loses
By Danielle DiQuattro
When Alexis de Tocqueville visited the United States, he praised American equality and democracy, as opposed to the aristocracy of his home country, France. He saw that the American Dream was grounded in the principle of equal opportunity for all. Dodd-Frank, in the wake of the 2008 financial crisis and “under the guise of consumer protection,” rejected this American tradition by giving special treatment to big banks.
Dodd-Frank established favoritism for large corporate banks by codifying “too big to fail” and enacting thousands of pages of regulations that disproportionately burdened local community banks and slowed the growth of small businesses.
The Financial CHOICE Act, which passed the House last Thursday, begins to reverse this policy. It significantly reduces taxpayer funding of Wall Street bailouts and government bureaucracy by repealing “too big to fail” policy and replacing it with the longstanding “bankruptcy laws,” thereby no longer shielding big banks from personal responsibility.
Bureaucratic self-dealings are also addressed under the CHOICE Act. All regulatory agencies, including the Consumer Financial Protection Bureau would be subject to congressional oversight, increasing accountability of these unelected officials.
Additionally, the CHOICE Act imposes greater penalties for corrupt practices like fraud, insider trading, and self-dealings, a prior role the federal government should be doing.
Through these reforms, the CHOICE Act takes power out of the hands of a select, favored few.
Not only does the CHOICE Act discourage bad behavior in Washington and Wall Street, but it incentivizes sound business and financial practices.
Heritage Action supports the CHOICE Act because it creates an environment that allows financial institutions and individuals to reap the benefits or costs of their own decisions. With an equal opportunity to succeed, banks, businesses, and consumers all benefit.