Skip to content

Mr. President, I rise today to talk about a subject I’ve spoken about several times over the past five years. Mr. President, I’m speaking of the Dodd-Frank Act, which passed this body five years ago today, on July 21, 2010. This mammoth bill, which totaled about 2,300 pages, has five years later led to many thousands of pages of rules and regulations and it is estimated that only 238 of the 390 rulemakings required by the law have been completed. Theoretically then, thousands more pages of regulations can be expected in the coming years. Regulations that do not fix “too big to fail,” unduly burden our community banks and credit unions, cover a host of industries that didn’t contribute to the financial crisis and compromise the privacy of Americans.

I’d like to take this opportunity to expand on these ideas. First of all, I’d like to point out that I actually read the whole bill. I read it, I highlighted, and I put in colored tabs in different sections so I could refer to them easily. And then I talked to my colleagues and spoke on the floor to raise concerns about the bill roping in industries that didn’t cause the financial crisis, about the fact that it didn’t fix “too big to fail,” and I raised a real ruckus about the creation of the Consumer Financial Protection Bureau – known as the CFPB – and its ability to collect the financial information of American citizens without their consent. I filed a very simple amendment that would have required the CFPB to obtain written permission from consumers before collecting their information and of course, my amendment was not allowed a vote and now the CFPB is collecting massive amounts of financial data.

So here we are, five years later. And hindsight is proving many of the concerns I raised during consideration of this bill were valid. I’ve often said that knee-jerk reactions in legislative form have a very real danger of overcorrecting and causing a myriad of other problems. Those problems are unintended consequences. In correspondence and conversation with folks from Wyoming over the years, I’ve said that I treat all legislation the same – I read it and I consider both intended and unintended consequences of the legislation. What I’m here to talk about today are some of the consequences of the Dodd-Frank Act after five years.

First, the “too big to fail” question. The Dodd-Frank Act was supposed to make it so American taxpayers would, according to President Obama, “never again be asked to foot the bill for Wall Street's mistakes…there will be no more tax-funded bailouts – period.” Dodd-Frank increased capital requirements, increased liquidity requirements, and has been adding rules and new regulations steadily for the past five years. Folks who support the law would say all of these are good things and make for a more secure financial sector. However, one of the contributors of “too big to fail” was the consolidation of banks in the financial industry, a byproduct of which was the reduction of the number of smaller community banks that serve small business owners, families, farmers and ranchers.

Thanks to the massive amount of rules and regulations the Dodd-Frank Act has resulted in, the compliance costs for community banks and credit unions has gone up significantly and increased the likelihood of consolidation. Smaller community banks struggle to keep up with the flow of regulations and compliance costs. For example, since the passage of Dodd-Frank, the average compliance costs for larger institutions is about 12 percent of operating costs. For community banks, the cost to comply with the same regulations – a one-size fits all approach – is two and a half times greater, or 30 percent of operating costs.

My state of Wyoming is one of the most rural in the country. There are nothing but community banks in Wyoming and I can attest that every visit I’ve had with bankers in Wyoming since this law passed has had one main subject that remains constant – we’re being crushed under the weight of these regulations and we’re having to make tough choices about the services we provide. Some of these banks are starting to consolidate with larger banks and become “branches.” Credit unions aren’t faring any better. According to the National Association of Federal Credit Unions, more than 1,250 credit unions have disappeared since the passage of Dodd-Frank. Of that number, over 90 percent had fewer than $100 million in assets and the number one reason they give for having to merge out of business is the inability to keep up with the regulatory burden they face. This is an unacceptable consequence of the Dodd-Frank law, and one folks on both sides of the aisle should be appalled by.

Equally appalling is the power the Dodd-Frank act afforded to the agency it created, the Consumer Financial Protection Bureau, or the CFPB. This agency has grown to over 1,450 employees, has a facility whose renovation budget has spiraled to over $216 million and faces almost no accountability to Congress. I don’t have enough time allotted to talk about all of the activities the CFPB has been engaged in, but make no mistake, this agency’s reach has increased exponentially over the past five years to the point where it is now taking enforcement actions covering telecommunications companies and has broadened its authority over the auto industry, which was explicitly exempted from CFPB oversight in Dodd-Frank. The CFPB issued a final rule on June 10, which would allow it to supervise nonbank companies qualifying as “larger participants of a market for automobile financing,” along with a separate rule defining certain auto leases as a “financial product or service.” What does this mean? It means the CFPB has expanded its oversight powers by saying, “Oh yes, auto leases are a financial product or service, and we’re allowed to regulate those, so we’ll just increase our level of oversight over this industry.” On the same day, the CFPB released its auto finance examination procedures for CFPB examiners to examine both banks and nonbanks. Keep in mind this is just one example, ONE, of the hundreds of rules, enforcement actions and other activities this agency is involved in across industries.

Beyond increasing its already incredible oversight reach, the CFPB has also been engaged in massive data collection dating back to 2011. I spoke about this data collection before the confirmation of Richard Cordray to be Director of the CFPB on July 16, 2013. I was the only senator to speak before this vote and I repeated something I said during debate of the Dodd-Frank Act that I think bears repeating again. On May 20, 2010 I said, “This bill was supposed to be about regulating Wall Street; instead it’s creating a Google Earth of your every financial transaction.  That’s right – the government will be able to see every detail of your finances.  They can look at your transactions from the 50,000 foot perspective or they can look right down to the tiny details of the time and place where you pulled cash out of an ATM.” I talked about some of the data we had at that time and I’m unfortunately going to expand on those comments today because the CFPB continues to collect massive amounts of data, without consent of consumers.

The Government Accountability Office, GAO, is a nonpartisan, independent agency that investigates how the federal government spends taxpayer dollars. They released an extensive report in September 2014 detailing the data collection of the CFPB. Here’s what they found.

Of the 12 large-scale data collections they reviewed, three included information that identified individual consumer. The CFPB said these three collections weren’t subject to the Dodd-Frank prohibition on collecting personally identifiable information. The CFPB is collecting data on 700,000 automobile sales per month, 10.7 million consumer credit reports per month, 25-75 million individual credit card accounts, 29 million active mortgage loans and 173 million total loans, as well as one-time collections of 5.5 million private student loans and 15-40 million payday loans. This isn’t the whole list, this is a sample rundown. Let’s take a minute to let these numbers sink in. The CFPB collects information on 25-75 million credit card accounts on a monthly basis. They want to be able to monitor 95 percent of all credit card transactions by 2016. I don’t know about you, but this is highly disturbing, especially in light of the fact that the same GAO report found the CFPB did not employ sufficient security and privacy protections to make sure this data remains safe. In summary, the CFPB is collecting sensitive financial information on millions of Americans, some of which has personally identifiable information that is supposedly removed or not used, and they do not have appropriate safeguard to protect this information. Considering the increase in cyber-attacks faced across different sectors in our country, including the federal government, this information is not just troubling, it’s terrifying. Especially because there is no way for a single American to opt out of this collection, or require notification that their information is being collected and stored. Not only that, there’s really no way for Congress to have a say, to exert oversight and take a closer look at what the CFPB is up to. One thing is clear to me, every American deserves better than this and after five years, I think it’s safe to say, we can do much better than this. I yield the floor.