Opposing view: Reforms miss the mark

April 22, 2010
USA TODAY
By Thomas J. Donohue

America's broken financial regulatory structure contributed to the loss of 7 million jobs in the current recession. The U.S. Chamber of Commerce is leading the effort to create more than 20 million jobs in the next 10 years, and we're urging Congress to pass financial reforms that help reach that goal.

The right reforms will protect consumers and ensure affordable access to capital for small businesses. The wrong reforms will stall our recovery by taking needed cash out of the hands of America's job creators.

Unfortunately, the Senate may soon vote on reforms that miss the mark on job creation and still fail to fix our financial system. We agree with Congress and the White House that there's a need to protect consumers and end "too big to fail" on Wall Street. But we think the bill Congress is currently considering falls short on these fronts.

Instead of strengthening the existing regulators in order to protect consumers, lawmakers want to create another federal agency — the Consumer Financial Protection Agency — with unprecedented and unchecked powers. This agency could impose new regulations on businesses that permit customers to pay in more than four installments or businesses that apply interest charges for late payments — like your neighborhood orthodontist.

But instead of just fighting these regulations, the U.S. Chamber is proposing a solution: a Consumer Protection Council. This group would protect small businesses by eliminating regulatory gaps in order to strengthen enforcement, providing consistent disclosure standards, and identifying areas where new regulations are necessary.

These same small businesses cannot be asked to bail out Wall Street again, as Congress is considering. In reforming the financial system, we must send a clear message that excessive and mistaken risks will be punished with failure. Unfortunately, Congress wants to prop up failing institutions with a $50 billion fund used as a safety net for failing firms. The administration recently joined us in opposing this fund, but now it's time to end "too big to fail" once and for all.

It has been 75 years since we last overhauled financial regulations. We need to get these reforms right. There is still time to fix the flaws in this partisan bill if our leaders can focus on the substance.

Ordinary Americans and small businesses need someone on their side as we reform the financial system. But they also need someone on their side to help create jobs and protect the economy. Our plan does all three.

Thomas J. Donohue is president and CEO of the U.S. Chamber of Commerce.