Main Street businesses deserve a choice

Rightfully wary of our financial institutions, post-recession America turned to well intentioned but misguided government intervention to fix our broken regulatory system. Through Dodd-Frank, the Consumer Financial Protection Bureau (CFPB) was created. But instead of helping consumers, the CFPB has only proven to suppress innovation. The Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act, which has passed in the House and is now being debated in the Senate, will rein in the unnecessary force of federal intervention into financial services while ensuring American consumers are truly being protected.

To understand how the Financial CHOICE Act will help America, we need to understand how Dodd-Frank and the CFPB hurt America. Overregulation, driven by the CFPB, dried up most of America’s well of accessible credit. Among the biggest victims of this consumer credit shortage were small business owners across the United States. In June of 2016, the CFPB proposed a rule that would regulate short-term credit, eliminating as much as 69 to 84 percent of the market. Want to stifle growth for mom-and-pop shops coast to coast? Limit their access to reasonable lines of short-term credit.

{mosads}The CFPB also stifled emerging, non-traditional lines of credit that have arisen through advancements in financial technology. These breakthroughs hold a significant promise of new financial opportunity for millions of unbanked and underbanked Americans.

When the Federal Reserve Board recently asked Americans how they would cover a $400 emergency, 47 percent said they would have to borrow the money or sell something to cover the cost. For people without access to traditional lines of credit, emerging mobile and online lenders offer new ways of building credit and access to capitol necessary to build personal wealth.

So how would the Financial Choice Act overturn the damage done by Dodd-Frank and the CFPB? For starters, the bill would remake the CFPB into the Consumer Law Enforcement Agency (CLEA). The agency would monitor lending and banking institutions, enforcing existing consumer protection laws, while limiting new regulations that continue to restrict access to credit and capital for Americans. As the House Financial Services Committee Chairman Jeb Hensarling (R-Texas) explained on MSNBC’s Morning Joe, “The best form of consumer protection is competitive, innovative, transparent markets that are vigorously policed for force and fraud.” Hensarling continued, “But the so called CFPB in many cases has actually hurt consumers since it has come into fruition…what we are trying to do is replace it with something called the Consumer Law Enforcement Agency that is there to actually enforce our roughly two-dozen major federal consumer protection laws. But it is there to enforce the law, not make up the law; and this particular agency is making up the law.”

If the CLEA comes to fruition and wants to prioritize the revitalization of America’s economy, it must make open lines of credit from both traditional and new channels a priority. The CFPB’s overbearing presence in the marketplace forced lenders to pull away from the public and discouraged new advancements in financial services. America’s 21st century economy will rely on our regulatory bodies to give Americans as much freedom as possible – embracing, not denying, new technology throughout every sector.

The House has passed responsible Dodd-Frank overhaul through the Financial CHOICE Act, and we should call on the Senate to do the same. Let’s hold them accountable to the promise of better times on Main Street that we have yet to see as a reality.

Mark E. Curry is a fintech leader, philanthropist, and impact investor.

The views expressed by this author are their own and are not the views of The Hill.