Congress Fails On Financial Regulatory Reform

What can businesses expect from the new financial regulatory reform law? Massive red tape and restricted access to credit, according to the U.S. Chamber.

“Congress had a historic opportunity to fix a broken system and it failed,” says Chamber President and CEO Tom Donohue. “For years–long before the markets collapsed–the Chamber has called for modernizing our capital markets. Instead of fixing the system, Washington just piled bureaucracies and massive new regulations onto a broken system. We are at risk of moving this country away from a government of the people to a government of regulators.This new law will only exacerbate uncertainty and jeopardize job creation. ”

A recent Chamber study finds that that the financial reform bill creates 533 required regulatory rulemakings, 60 studies, and 93 reports. By contrast, the Sarbanes-Oxley legislation passed in 2002 only had 16 rulemakings and six studies.

The bill creates a new powerful independent federal agency that will make consumer financial products more expensive and further restrict access to credit. The bill also increases the influence of unions and activist investors in corporate governance matters and regulates the derivatives market in a way that may lead to a significant drain in working capital from corporate end users of derivatives.

“Businesses are concerned with the result of Congress’ efforts, but understand that we’re only in the first round of this fight,” Donohue says. “In order to protect Main Street businesses, the Chamber will continue working with the growing number of regulators in the coming years as this bill takes effect.”

More than six in ten (62%) Main Street business owners are concerned that “the new financial regulatory reform bill will result in an enormous regulatory burden on U.S. businesses,” resulting in “slower economic growth and fewer American jobs,” according to an independent poll of 300 small businesses.

“The voices of America’s job creators are ringing loud and clear – enough is enough,” Donohue says. “We are seeing evidence in everything from health care to financial reform to energy that growing government does not grow jobs. Going forward, we will use all available options to correct the flaws in this bill, eliminate business uncertainty, and put Americans back to work.”