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  • Issue Brief posted January 4, 2017 by Norbert J. Michel, Ph.D. Repealing the Durbin Amendment: A Vote for the Rule of Law

    Section 1075 of the Dodd–Frank Wall Street Reform and Consumer Protection Act, known as the Durbin Amendment, requires the Federal Reserve Board of Governors to cap the debit card interchange fees that large banks charge.[1] These fees, charged to merchants every time consumers swipe their debit cards, have long been a source of controversy. Since the 1980s, as the volume…

  • Issue Brief posted December 19, 2016 by Norbert J. Michel, Ph.D. Six Recommendations for the CHOICE Act 2.0

    President-elect Donald Trump has promised to get rid of the Dodd–Frank Wall Street Reform and Consumer Protection Act.[1] Eliminating the law ultimately requires legislative action, so an obvious guide is the Financial CHOICE Act of 2016, a bill that replaces large parts of Dodd–Frank. The core elements of the CHOICE Act represent a major regulatory improvement because…

  • Testimony posted October 6, 2016 by Norbert J. Michel, Ph.D. FDIC Insurance and the Brokered Deposit Market: Not a Recipe for Market Discipline

    Testimony before Committee on Financial Services, Financial Institutions and Consumer Credit Subcommittee U.S. House of Representatives September 27, 2016  Chairman Neugebauer, Ranking Member Clay, and Members of the Committee, thank you for the opportunity to testify at today’s hearing. My name is Norbert Michel and I am a Research Fellow in Financial Regulations at…

  • Backgrounder posted September 23, 2016 by David R. Burton, Norbert J. Michel, Ph.D. Financial Privacy in a Free Society

    Privacy, both financial and personal, is a key component of life in a free society. Unlike in totalitarian or authoritarian regimes, individuals in free societies have a private sphere free of government involvement, surveillance, and control. The United States Constitution’s Bill of Rights, particularly the Fourth, Fifth, and Ninth Amendments, together with structural…

  • Backgrounder posted September 14, 2016 by Norbert J. Michel, Ph.D. Fixing the Regulatory Framework for Derivatives

    Many policymakers have strong opinions on the risks of derivatives, but there is no objective economic reason to regulate derivatives as a unique product. To the contrary, it is best to avoid regulating derivatives as a unique product because doing so is bound to result in a complex set of rules filled with special exemptions for select users. Prior to the 2008 financial…

  • Backgrounder posted August 31, 2016 by Norbert J. Michel, Ph.D. Money and Banking Provisions in the Financial CHOICE Act: A Major Step in the Right Direction

    House Financial Services Committee Chairman Jeb Hensarling (R–TX) has released a discussion draft of a major regulatory reform bill called the Financial CHOICE Act.[1] This legislation would replace large parts of the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act. Key sections of the bill would reduce the risk of future financial crises and bailouts, and…

  • Commentary posted August 31, 2016 by Norbert J. Michel, Ph.D. They Came For MetLife, And I Said Nothing, Then They Came For Home Depot

    The latest round in the battle between MetLife and the Financial Stability Oversight Council (FSOC) is officially underway. MetLife has filed its brief with the U.S. Court of Appeals for the D.C. Circuit. The donnybrook began in September 2014, when the FSOC, a sort of super-regulatory agency created by the 2010 Dodd–Frank Act, tagged MetLife for special regulation by…

  • Commentary posted August 31, 2016 by Norbert J. Michel, Ph.D. The Big Short: A Great Movie, Not A Policy Prescription

    For the last year or so, countless people have asked me what I thought of the movie “The Big Short.” Thanks to Netflix, I’ve finally seen it. I was impressed. It was pretty entertaining and did a great job explaining some complex financial topics. If I were still teaching, I’d probably use clips from it to liven up lectures on mortgage-backed securities (MBS) and…

  • Commentary posted July 27, 2016 by Norbert J. Michel, Ph.D. Dodd-Frank and Glass-Steagall: 'Consumer Protection for Billionaires'

    It may be hard to believe, but I pay very little attention to presidential politics. People send me news clips and ask me what I think about what the candidates said, but I generally don’t indulge them. This week, however, a friend sent me a clip from a Donald Trump Jr. speech that actually got my attention. Trump the younger, of course, is not running for political…

  • Commentary posted July 14, 2016 by Norbert J. Michel, Ph.D. Why Big-Wig Financial Execs Love Dodd-Frank

    House Financial Services Committee Chairman Jeb Hensarling (R-Texas) has released a discussion draft of the Financial CHOICE Act, legislation that would replace large parts of the failed Dodd-Frank Act. It has attracted some high-profile fans. Three Nobel Prize winning economists, a former U.S. Treasury Secretary, and a host of academics and policy officials have released…

  • Issue Brief posted July 7, 2016 by Justin Bogie, David R. Burton, Norbert J. Michel, Ph.D. 2017 House Financial Services and General Government Bill: Reduces Spending, But Does Not Go Far Enough on Policy Changes

    This week, the House is expected to consider the Financial Services and General Government appropriations bill. This bill provides funding for the Treasury Department, the Justice Department, the Small Business Administration, and the Securities and Exchange Commission, among other agencies. The fiscal year (FY) 2017 bill provides a total of $21.7 billion in…

  • Commentary posted June 17, 2016 by Norbert J. Michel, Ph.D. CFPB's Payday Lender Rules: Markets Exploit, Government Saves

    Radical change may soon come to the short-term lending business. And we’re not talking about the good kind of change. New rules proposed by the Consumer Financial Protection Bureau (CFPB) are bad news for consumers, those who work for short-term lenders, and the people who supply the capital to make these loans. Topping out at more than 1,300 pages, the proposal is a…

  • Commentary posted June 6, 2016 by Norbert J. Michel, Ph.D. Shrink The Government's Role To End Too-Big-To-Fail

    We have now entered the Bizarro World of financial regulations, where the people who in 2008 orchestrated billions in bailouts for “too big to fail” institutions are now insisting that they can craft a plan to end “too big to fail.” That’s right. The same people who once insisted that the only way to head off an economic crisis was for the federal government to bail out…

  • Issue Brief posted May 18, 2016 by Justin Bogie, Norbert J. Michel, Ph.D., Michael Sargent Senate Bill Should Cut Wasteful Programs and Provide Long-Term Sustainability for Highway Programs

    The Senate will soon consider the Transportation, Housing and Urban Development (THUD) appropriations bill. The THUD bill provides funding for the Departments of Transportation and Housing and Urban Development. The 2017 bill provides a total of $56.5 billion in discretionary budget authority. This represents an $827 million decrease below the current funding level and…