The financial sector drives American economic growth and global competitiveness. Yet, this vital industry has been burdened by many inhibitors that have obstructed its ability to thrive.

This Congress, the House Financial Services Committee is committed to eliminating these roadblocks by reducing unnecessary red tape, expanding access to capital for small businesses and community banks, and fostering innovation. These priorities aim to create a more dynamic and robust financial system that will allow the American economy to truly enter a new Golden Era.

Overregulation stifles economic progress, making it harder for financial institutions to serve their customers. Community banks, which provide nearly 40% of all small business loans in the U.S., are particularly burdened by excessive compliance costs. The Dodd-Frank Act of 2010 “nearly doubled the number of regulations for U.S. banks and added approximately $50 billion in annual compliance costs for the industry,” according to the American Bankers Association. Fifteen years later, we are still seeing the detrimental impacts of several provisions within Dodd-Frank, which was not helped by the rulemakings of the Biden administration, killing jobs and increasing red tape.

The House Financial Institutions Committee is prioritizing efforts to ensure that regulations are appropriately tailored to mitigate actual risk. A key focus will be examining the current regulatory frameworks at the Treasury Department and the Consumer Financial Protection Bureau to ensure that the supervisory landscape is clarified and does not excessively infringe on financial institutions.

The committee also recognizes that specified regulations with a clear compliance system can serve to protect consumers without hindering growth. It can be made possible by eliminating redundant and overly complex regulations that currently stand in the way of banks focusing their resources on growth and serving their customers.

If the financial industry is the engine of economic growth, then small businesses and community banks are the pistons that give the engine the power to operate. Small businesses create nearly two-thirds of all new jobs, yet many struggle to access the capital needed to expand. A recent study by Goldman Sachs found that 77% are concerned about access to capital.

We are working to modernize outdated lending regulations that disproportionately impact small banks and credit unions. These institutions play a crucial role in supporting local businesses, yet they face increasing compliance costs that limit their ability to lend. By reforming these policies, we can ensure that banks have the flexibility to serve their customers without unnecessary government interference.

A modern financial system must embrace innovation while maintaining market stability. The committee is dedicated to reforming outdated regulatory structures, including those set forth by the U.S. Securities and Exchange Commission. Doing so will create a more coherent oversight framework that will encourage responsible innovation, enhance market efficiency and provide greater clarity for financial institutions exploring emerging technologies. By addressing inefficiencies and overreach, we can create an environment that encourages responsible financial innovation while ensuring fair and stable markets.

In 2023, the House Financial Services Committee passed the bipartisan Financial Innovation and Technology for the 21st Century Act (FIT21), which provided a “fit for purpose” regulatory framework for digital assets that establishes a comprehensive regulatory framework for cryptocurrency regulation that includes strong, reliable consumer protections and enables digital asset innovation to thrive in the U.S. This Congress, we have a real opportunity to enact legislation into law and preserve United States’ supremacy over emerging technologies. Chairman French Hill, R-Ark., has been in close discussions with relevant stakeholders in the House, Senate and Trump administration, and is working to make sure we are marching in lockstep. Many lessons were learned as the committee drafted FIT21, and I am excited to work with the chairman and committee to use those lessons learned to inform our work on market structure and stablecoin this Congress.

Advancements in financial technology have the potential to revolutionize banking services. As policymakers, it is our job to ensure that consumers and investors are protected, and that the U.S. remains a leader in these emerging technologies. The problem remains, however, that without a regulatory framework that supports responsible innovation, these advancements risk being stifled. By modernizing financial regulations, we can ensure that banks can remain competitive in a rapidly evolving marketplace.

A strong financial system relies on smart regulation, small business growth and innovation. By cutting red tape, expanding capital access and embracing financial technology, we can create new opportunities for banks and communities.