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HOUSE CONCURRENT RESOLUTION
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WHEREAS, The banking and insurance industries are essential |
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to the continued growth and well-being of Texas, serving as |
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important hubs of economic activity for communities throughout the |
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state; the Dodd-Frank Wall Street Reform and Consumer Protection |
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Act not only poses a major threat to these businesses, but will |
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serve as a destructive influence on the entire state; and |
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WHEREAS, The Dodd-Frank Act, which was passed by the United |
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States Congress on July 21, 2010, consists of 2,300 pages of new |
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statutory language and increases the size of the federal government |
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by creating 13 new regulatory agencies; supporters of the |
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legislation claim that it will equip federal regulators with powers |
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to prevent another financial debacle like the country experienced |
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from 2007 through 2009, but in reality, the bill sets up a |
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regulatory regime that allows "Too Big to Fail" banks and Wall |
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Street to continue to avoid adequate scrutiny while it punishes |
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traditional Texas banks that had nothing to do with the recent |
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crisis; and |
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WHEREAS, Established to regulate all consumer financial |
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services in the United States, the new Consumer Financial |
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Protection Bureau will receive hundreds of millions of dollars in |
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annual funding from the Federal Reserve System and is not subject to |
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congressional oversight through the appropriations process; it has |
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been granted the power to decide what types of financial products |
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can and cannot be offered, as well as the power to set prices for |
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consumer loans, mortgages, and small business loans; and |
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WHEREAS, If this new agency becomes what its advocates have |
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envisioned, it will be at least as large as the Internal Revenue |
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Service; Texas banks will have fewer and more expensive products to |
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offer to their customers, and the credit needs of rural and urban |
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Texans will be determined by an agency in Washington; and |
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WHEREAS, The Consumer Financial Protection Bureau will also |
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greatly increase compliance costs for Texas community banks; |
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smaller banks will see their compliance and employee costs increase |
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by tens of thousands of dollars on an annual basis, resulting in |
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millions of dollars in loans lost to area communities; furthermore, |
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these new costs will drive down profitability and lead to the |
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consolidation of the banking industry; fewer banks mean less credit |
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and fewer choices for borrowers across the state; and |
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WHEREAS, Even before the effective date of the Dodd-Frank |
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Act, federal bank regulators began examining banks and imposing |
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sanctions that have harmed credit availability all over Texas; in |
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the name of consumer protection and fair lending, the federal |
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agencies have curtailed services, such as overdraft protection, |
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that are wanted by Texas bank customers; the limitation on bank |
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service fees will increase costs for all consumer services and lead |
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to the end of offerings such as free checking; during fair lending |
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examinations, banks are being told that discrepancies of a few |
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cents in the charging of interest rates can lead to referrals to the |
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U.S. Department of Justice; this has led to a chilling effect and a |
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reluctance by community banks to make small consumer and business |
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loans; and |
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WHEREAS, Another example of federal intervention in the |
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pricing of financial products is the rate caps placed on |
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interchange fees for debit cards; the Dodd-Frank Act takes the |
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pricing of these services from the marketplace and places it in the |
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hands of the Federal Reserve; severe restrictions on interchange |
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fees could leave banks and credit unions unable to cover the full |
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costs associated with providing checking accounts and debit cards |
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and force them to cease offering some debit and checking products |
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and to increase fees on those they continue to provide; lower income |
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Texans who have obtained greater access to affordable retail |
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banking, partly because of interchange fees, would have less access |
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to traditional institutions and be forced to go back to the less |
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regulated "shadow" banking system with its increased costs; now, |
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therefore, be it |
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RESOLVED, That the 84th Legislature of the State of Texas |
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hereby respectfully urge the Congress of the United States to |
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repeal the Dodd-Frank Wall Street Reform and Consumer Protection |
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Act; and, be it further |
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RESOLVED, That the Texas secretary of state forward official |
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copies of this resolution to the president of the United States, to |
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the president of the Senate and the speaker of the House of |
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Representatives of the United States Congress, and to all the |
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members of the Texas delegation to Congress with the request that |
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this resolution be entered in the Congressional Record as a |
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memorial to the Congress of the United States of America. |