Brown, Reed, Menendez, Warren: "Stress Test" Shows Dodd-Frank Working
Senators say now is not time to roll back protections
Washington, DC - U.S. Sen. Sherrod Brown (D-OH) - ranking member of the Senate Banking, Housing, and Urban Affairs Committee - and his Banking Committee colleagues U.S. Sens. Jack Reed (D-RI), Bob Menendez (D-NJ), and Elizabeth Warren (D-MA) said today that the strong performance of U.S. banks in the stress test is further proof that the Dodd-Frank Wall Street Reform and Consumer Protection Act is working and now is not the time to roll back the protections put in place following the 2008 financial crisis.
"If no one fouls out in a game, you don't fire the referees," said Brown. "Dodd-Frank has led to a safer banking system, and we should not scrap the rules because the banking system is less fragile than it was a few years ago - that's how we know they're working."
"Dodd-Frank works. It protects taxpayers from another bailout and consumers from the unscrupulous. To those who say it's hurt business, I'd point to a recent banking witness from Georgetown University who found community banks pre-tax return on equity was 225% and the figure for mega-banks was 320%. There's always room to improve regulation, but these stress tests show Dodd-Frank repeal is a bad idea," said Reed.
"It's indisputable that our banking system is stronger, safer, and more resilient today because of the reforms we instituted after the financial crisis," said Menendez. "And a stronger, safer, and more resilient banking system will help foster long-term economic growth, homeownership, and small business lending."
"Passing the stress test is the minimum a big bank can do, and the banks passed in large part because of new financial rules that required them to strengthen their balance sheets," said Warren. "Using the stress test results as an excuse to weaken those tests or roll back the rules is pure lobbyist spin, and I'm not buying it."
The Federal Reserve announced the results of the fifth round of annual stress tests required by the Dodd-Frank Act on Thursday, June 22, 2017. The results of an additional stress testing exercise, the Comprehensive Capital Analysis and Review (CCAR) will be announced on Wednesday, June 28, 2017.
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