Home » Santa Clarita News » Politics » Knight Supports CHOICE Act, Roll Back Of Dodd-Frank Regulations OK’ed After Crisis

Knight Supports CHOICE Act, Roll Back Of Dodd-Frank Regulations OK’ed After Crisis

Members of the House of Representatives passed a bill authored by Congressman Steve Knight that would roll back regulations created in the aftermath of the 2008 financial crisis Friday.


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The House passed H.R. 10, the Financial CHOICE Act, which aims to revise the Dodd-Frank Act passed by Congress in 2010, passed by a vote of 233-186.

CHOICE, which stands for Creating Hope and Opportunity for Investors, Consumers, and Entrepreneurs, received support from a wide variety of community banks and credit unions, taxpayer protection advocates and veteran organizations.  

The bill seeks to “end bank bailouts, offer much needed regulatory relief for our local community banks and credit unions, unleash opportunities for small businesses, stimulate economic growth, and empower Americans to achieve financial independence,” according to a statement from Knight’s office.

“The Financial CHOICE Act is a long-awaited replacement to the burdensome Dodd-Frank law, which created more rules and restrictions than all other legislation from the past 8 years combined,” Knight said. “Dodd-Frank regulations masqueraded as being friendly to consumers and businesses, when in reality this could not have been farther from the truth.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act brought comprehensive reform to the regulation of swaps, according to CFTC officials. These products, which have not previously been regulated in the United States, were at the center of the 2008 financial crisis.

Passed in 2010 and also known as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), the law “enhanced the Commodity Futures Trading Commission’s regulatory authority to oversee the more than $400 trillion swaps market,” according to the CFTC site.

As a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFTC has written rules to regulate the swaps marketplace.

The historic Dodd-Frank bill authorized the CFTC to:

Regulate Swap Dealers

  • List of Provisionally Registered Swap Dealers
  • Swap dealers will be subject to capital and margin requirements to lower risk in the system.
  • Dealers will be required to meet robust business conduct standards to lower risk and promote market integrity.
  • Dealers will be required to meet recordkeeping and reporting requirements so that regulators can police the markets.

Increase Transparency and Improve Pricing in The Derivatives Marketplace

  • Instead of trading out of sight of the public, standardized derivatives will be required to be traded on regulated exchanges or swap execution facilities.
  • Transparent trading of swaps will increase competition and bring better pricing to the marketplace.  This will lower costs for businesses and consumers.

Lower Risk to the American Public

  • Standardized derivatives will be moved into central clearinghouses to lower risk in the financial system.
  • Clearinghouses act as middlemen between two parties to a transaction and take on the risk that one counterparty may default on its obligations.
  • Clearinghouses have lowered risk in the futures marketplace since the 1890s.  The Dodd-Frank bill brings this crucial market innovation to the swaps marketplace.

The Congressional Budget Office has indicated that the Financial CHOICE Act would save taxpayers $24.1 billion over 10 years and that the bill’s regulatory relief would benefit community banks and credit unions.

Knight said the Dodd-Frank Act stifled growth and hampered small business.

“These regulations strangled the growth of our community and local banks and credit unions which, in turn, were unable to keep credit available for families and small businesses to create new jobs and opportunities”, said Rep. Knight “On average, one community bank per day was forced to shut down under Dodd-Frank. The Financial CHOICE Act will allow small businesses to grow by expanding vital access to capital.”  

 

KHTS AM 1220 - Santa Clarita Radio

Knight Supports CHOICE Act, Roll Back Of Dodd-Frank Regulations OK’ed After Crisis

One comment

  1. I hope you will review this NY Times article before you believe this bunch of blarney that it’s going to help us. It’s strictly a boondoggle for Wall Street. As usual, Knight takes care of his rich benefactors and hangs us out to dry. https://www.nytimes.com/2017/06/08/business/dealbook/house-financial-regulations-dodd-frank.html?mcubz=2&_r=0

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About Perry Smith

Perry Smith is a print and broadcast journalist who has won several awards for his focused, hyperlocal community coverage in several different regions of the country. In addition to five years of experience covering the Santa Clarita Valley, Smith, a San Fernando Valley native, has worked in newspapers and news websites in Los Angeles, the Northwest, the Central Valley and the South, before coming to KHTS in 2012. To contact Smith, email him at Perry@hometownstation.com.