While details have yet to be released, the proposed Financial CHOICE Act would provide financial institutions with an alternative to the current Dodd Frank regulatory regime. They would be allowed to opt in to the alternative plan if they can meet critical capital thresholds, including a 10% leverage ratio, which is a measure of capital held by a bank against its total assets and governs the amount of lending banks can do.
Some of the key principles of this proposed reform include:
- Economic growth must be revitalized through competitive, transparent, and innovative capital markets.
- Every American, regardless of their circumstances, must have the opportunity to achieve financial independence.
- Consumers must be vigorously protected from fraud and deception as well as the loss of economic liberty.
- Taxpayer bailouts of financial institutions must end and no company can remain too big to fail.
- Systemic risk must be managed in a market with profit loss.
- Simplicity must replace complexity, because complexity can be gamed by the well-connected and abused by the Washington powerful.
- Both Wall Street and Washington must be held accountable.
Below is a copy of House Financial Services Committee Chairman Jeb Hensarling's (R-TX) speech before the Economic Club of New York yesterday morning, along with the full executive summary of his Dodd Frank reform plan: The Financial CHOICE Act.
Financial CHOICE Act- Executive Summary
Information provided by The Real Estate Roundtable