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Thursday, July 15, 2010

Dodd-Frank: Main Street and Taxpayers Will Suffer

SBE Council is opposing the massive 2,300 finanical regulatory overhaul bill that is moving through the Congress. We sent a letter to the Senate today, urging opposition to the bill and letting Senator know we will "Key Vote" Dodd-Frank in SBE Council's forthcoming Ratings of Congress.

Here is the text of SBE Council President & CEO Karen Kerrigan's letter to all U.S. Senators:

Dear United States Senator:

The Small Business & Entrepreneurship Council (SBE Council) and our nationwide membership of entrepreneurs are very disappointed in the outcome of the financial regulatory reform bill.

The Dodd-Frank conference report does little to address the root cause of the financial mess -- that is, Fannie Mae and Freddie Mac remain untouched even though they played a key role in fueling irresponsible lending, which then led to reckless financial transaction behavior. SBE Council is hearing from entrepreneurs all across the country that fear that measures in the 2,300-page legislation will lead to tighter credit, higher capital costs and more control of their businesses.

Dodd-Frank includes hundreds of new regulations that will have unintended consequences for entrepreneurs, consumers and smaller players in the financial services industry. Similar to the health care bill, no one really understands the details of the legislation or the consequences of creating hundreds of new rules that could potentially overlap, conflict or promote dysfunctional conduct by government or the private sector. But we do know one outcome for sure -- the costs and consequences of such regulation on a massive scale will ultimately be borne by consumers and small businesses in the form of higher costs and less flexible/innovative choices in products and services.

While SBE Council appreciates the fact that some small business protection as it relates to the new Consumer Financial Protection Bureau has been included in the legislation, our concerns regarding the bill’s overall effect on small business financing remains tantamount. Our analysis of the massive and complex regulatory framework that Dodd-Frank imposes leaves us to conclude that small business owners and entrepreneurs are not well served by the legislation.

Small business owners are appalled that new spending in Dodd-Frank is paid for with TARP bailout funds. TARP dollars should be returned to the taxpayer as promised, and not used for more spending our nation cannot afford.

Unfortunately, Dodd-Frank is a bill that gives more power, authority, control and money to the very regulators and bureaucracies that failed the American people in the first place. Meanwhile, big interests on Wall Street will easily navigate the new rules while small business owners suffer the consequences. Indeed, and as reported by the media, big financial interests have already deciphered Dodd-Frank and are planning their next steps for lobbying the regulatory agencies. In contrast, small business owners will be forced to react to its costly consequences.

SBE Council opposes Dodd-Frank, and we will score the bill in our forthcoming Ratings of Congress as a vote against the interest of small business. We urge you to VOTE NO on this misguided and costly legislation.

Dodd-Frank is bad for small business. Let's hope the Congress wakes up to this fact!

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