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Statement of the Honorable Yvette Clark

Ranking Member

House Committee on Small Business

Subcommittee on Investigations, Oversight and Regulations

Hearing on the Regulation of Small Financial Institutions

December 3, 2013

Thank you, Chairman Schweikert, and I’d like to thank our witnesses for their testimony this morning. 

I think it’s prudent to take a moment to remember why Dodd-Frank was implemented in the first place.  For those who choose not to remember, five years ago, widespread malfeasance brought our nation to the brink of financial collapse.  Were it not for swift Congressional action on behalf of the American people, we would be living in a very different America today. 

And the American people have overwhelmingly supported this action.  According to a survey conducted by the Center for Responsible Lending, 83% of those surveyed, including 75% of Republicans favor tougher regulation of financial institutions. 

Dodd-Frank has been a lightning rod for critics and supporters alike throughout its debate and even as it has stood as the law of the land for the past three years.

The Consumer Financial Protection Bureau, an agency who’s responsibility it is to protect consumers from unfair, deceptive and abusive financial products, was created by Title X of Dodd-Frank and remains one of the provisions under the most scrutiny.

Since beginning operations, the CFPB has secured more than $750 million for millions of consumers who were subjected to deceptive practices; imposed penalties on companies to deter future activity; and warned others to clean up their deceptive practices. 

While the CFPB’s primary responsibility is to regulate financial products,  it is also clear that small financial institutions were not the cause of the recent financial calamity  Small businesses use these products as well in the form of personal credit cards and home equity loans to finance their businesses.  Therefore, it is important that the CFPB balance the need to regulate abusive practices without adversely affecting the credit market for small businesses. 

With this in mind, Congress recognized that small financial institutions were not the cause of the financial crisis and took steps to shield small community banks, merchants and retailers from the extra scrutiny by the CFPB. 

Additionally, the CFPB must conduct small business advocacy review panels, becoming only the third agency to be required to do so.  These protections were put in place with the small business community in mind and to ensure that the engines of our national economy would be able to power us to a full recovery without undue burden.

The CFPB is vitally important to improving the integrity of our financial apparatus and it is important that the CFPB ensure its integrity while ensuring that the small business community is allowed to thrive with little interruption.  Today we will hear from experts and stakeholders about the state of the CFPB’s regulatory activities.  I want to again thank our witnesses for their testimony today. 

I yield back.

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