While at first glance the two of us may not seem to have much in common, we have managed to bridge differences in age, region and party to find common ground on the most important issue of the day: repairing our broken economy.
Earlier this year, we joined forces on an innovative piece of legislation to temporarily suspend the payroll tax for small businesses. The measure has gradually gained traction as more people from across the political spectrum realize the value of finding new ways to stimulate the economy and more directly help small businesses and consumers.
As important as it is to stimulate our economy, the flip side to that coin is reforming the process by which we regulate big banks and Wall Street, the very groups responsible for the broken economy in the first place. We must also demand accountability from the regulatory agencies themselves because there is no doubt that the federal government did not conduct proper oversight of the financial industry.
What we need is accountability, a streamlined process and regulations written to reflect the rapidly changing landscape of the financial industry. We believe that we can get there with bipartisan consensus, as members of both parties agree that our nation must not repeat these mistakes, and must enact and enforce responsible oversight and control mechanisms.
Although the administration has proposed many laudable reforms, we take issue with duplicative or overly prescriptive regulations, and with reforms that do not go far enough in redefining how our regulatory system is structured.
For example, one portion of the overall effort for regulatory reform is legislation to establish a Consumer Financial Protection Agency (CFPA), which would be responsible for the consolidation and enforcement of federal financial consumer protection laws.
However, our respective experiences in business — one of us as a young small-business owner, and the other as a businessman with 35 years of experience — causes each of us to believe consumer protection will thrive if we have just a few federal agencies, but with broader responsibilities.
Every regulation impacts both a bank’s profitability and how well it serves its customers. To create, as CFPA would do, two regulators, one trying to keep it sound financially and another to protect its customers from abusive loan practices, will lead to conflict and paralysis. It will also increase the burdens on the small banks, which are the primary sources of the credit that homeowners and small-business owners in our districts so desperately need to create new jobs and get us out of this recession.
We will not reform Wall Street by hurting small community banks, which are part of the solution, not the problem; or by adding new, overlapping federal agencies, creating new turf wars and continuing to run the risk that gaps will form. We must protect consumers and prevent future speculators from finding new ways to bring this nation to the brink of economic ruin.
We must make sure that government plays an appropriate, limited but effective role. Congress should punish those who caused this mess, fix the problems so it doesn’t happen again and then get out of the way to let free enterprise work.
We can do this together, and look forward to working with our colleagues to ensure that the financial regulations already in place are strengthened where necessary, and that existing laws are enforced as prescribed.
