WASHINGTON, D.C. – U.S. Rep. Charlie Dent (PA-15) today voted against the 2,319 page Conference Report to H.R. 4173, which will make bailouts permanent, impede job creation on Main Street, jeopardize access to credit for small businesses and lead to higher costs and fewer financial products for American consumers. Of note, financial giant Goldman Sachs supports this legislation, claiming Wall Street will be its biggest beneficiary.

Chairman Barney Frank’s bill will ultimately have a negative impact on families across the country, greatly limiting consumer options in the 15th District. Neighborhood community banks and credit unions that have diligently served local consumers and businesses for years will be restricted in their lending capacity and potentially forced to increase fees on checking accounts and other basic financial services, while reducing the availability of other financial products like debit and credit cards.

This legislation codifies the notion of ‘too big to fail’ by creating a special federal resolution process for large financial firms -- the expense of which will be borne by taxpayers -- rather than working through the bankruptcy process. What’s worse, this financial regulatory overhaul creates an environment of ‘too small to succeed’ by imposing onerous and costly new rules on small banks and credit unions, and sets the table for future market consolidation through bank failures and mergers. The Main Street banks many local residents have long trusted to provide more personalized service will be forced to make borrowing decisions based on a framework determined in Washington above actual market conditions in regions like the Lehigh Valley. Simply stated, loan decisions will be based substantially on regulatory compliance costs, as opposed to the credit worthiness of the borrower.

“Unfortunately, this measure will have a dramatic negative impact on families, homebuyers and small businesses’ ability to access credit. Less credit will be available for job creation and home ownership to people who are otherwise creditworthy,” Dent explained. “Moreover, this legislation punishes community banks and credit unions in our region – institutions in no way responsible for the 2008 financial crisis that this bill is supposedly designed to address.”

Remarkably, the Conference Report fails to implement necessary reforms of Fannie Mae and Freddie Mac, now operating off $146 billion in federal funds and whose negligent lending practices were a principal driving force behind the 2008 financial crisis. Alarmed by their risky lending activities, Dent supported efforts in Congress to reform Fannie and Freddie prior to 2008, which ultimately died in the U.S. Senate.

This bill is paid for by raiding repaid and unspent TARP funds and by raising FDIC premiums. Moreover, FDIC premiums will be increased on financial institutions, even those that did not receive TARP funds, to pay for the creation of new federal bureaucracies and billions of dollars in new government spending. Instead, these TARP funds should be repaid to the taxpayer for deficit reduction.

“The American people expect Congress to address the core issues that led to the crisis of 2008,” Dent continued. “Rather than developing a bill that sufficiently protects consumers from future financial emergencies, we’ve regrettably passed legislation that limits their options and diminishes their opportunities while hindering economic growth and job creation at a time when our nation’s average unemployment rates continue to hover at 10 percent.”