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HOUSE CONCURRENT RESOLUTION
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WHEREAS, the banking and insurance communities are essential |
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to the continued growth and well being of the State of Texas. Were |
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and still are essential to the development of Texas, serving as |
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important hubs of economic activity for communities all across the |
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state; the Dodd-Frank is destructive to the State of Texas and the |
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citizens within and a constant threat to businesses; and |
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WHEREAS, The Dodd-Frank Wall Street Reform and Consumer |
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Protection Act was passed by the United States Congress on July 21st |
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of 2010. It consists of 2,300 pages of new statutory language that |
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will result in the promulgation of over 250 new federal |
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regulations. Supporters of the legislation claim that it will equip |
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federal regulators with powers to prevent another financial debacle |
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like the country experienced from 2007 through 2009. In reality, |
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the bill sets up a regulatory regime that allows "Too Big to Fail" |
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banks and Wall Street to continue to avoid adequate scrutiny while |
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it punishes traditional Texas banks that had nothing to do with the |
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most recent crisis; and |
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WHEREAS, A new Bureau of Consumer Financial Protection is |
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established to regulate all consumer financial services in the |
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United States. It will receive hundreds of millions of dollars in |
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funding annually from the Federal Reserve System and is not subject |
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to Congressional oversight through the appropriations process. The |
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Bureau will have the power to regulate what types of financial |
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products can be provided and which products cannot be offered. It |
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will have the power to set prices for consumer loans, mortgages and |
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small business loans. If this new agency were to become what its |
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advocates have envisioned it will be at least as large as the |
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Internal Revenue Service. Texas banks will have fewer and more |
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expensive products to offer to their customers. The credit needs of |
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rural and urban Texans will be determined by an agency in |
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Washington; and |
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WHEREAS, The Bureau of Consumer Financial Protection will |
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also 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. This will result |
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in millions of dollars in loans that will not be loaned in their |
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communities. Further, these new costs will drive down profitability |
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and lead to the consolidation of the banking industry. Fewer banks |
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mean less credit and fewer choices for borrowers across the state; |
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and |
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WHEREAS, Even before the effective date of the Dodd-Frank |
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Act, federal bank regulators have been examining banks and imposing |
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sanctions that are harming 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 are curtailing 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 cents |
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in the charging of interest rates can lead to referrals to the U.S. |
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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 are 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. The most recent proposal from the |
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Federal Reserve would so severely restrict interchange fees that |
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banks and credit unions will be unable to cover the full costs |
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associated with providing checking accounts and debit cards. As a |
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result, banks and credit unions will be forced to cease offering |
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debit and checking products and increase fees to their retail |
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customers for checking accounts, debit cards and other retail |
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services. Lower income Texans who have obtained greater access to |
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affordable retail banking, partly because of interchange fees, will |
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have less access to traditional institutions and be forced to go |
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back to the less regulated "shadow" banking system with its |
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increased costs now, therefore, be it |
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RESOLVED, That the 82nd Legislature of the State of Texas |
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hereby urge The United States Congress to repeal this destructive |
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law. |