Op-Ed: Bank Failures Hurt Small Businesses and Consumers, Capitol Hill Blame Game Ineffective.

Capitol Hill Blame Game Does Nothing to Help Small Businesses and Consumers

Banking executives recently faced tough questions from the House Financial Services Subcommittee about failures in the financial system this year. But while the blame game continues, the real losers are small businesses and consumers.

Regardless of who or what is to blame, the real winners in this scenario are the big banks.

As the banking crisis unfolded earlier this year, talking heads on television and Biden administration officials doubled down on “too big to fail” rhetoric. This line of reasoning prioritizes large banks over community institutions, leaving small businesses and consumers vulnerable.

The Rise of “Too Big to Fail”

Individuals, investors, and companies began parking capital in “too big to fail” institutions, leaving community and regional financial institutions drained of funds. This new status quo is bad news for Main Street businesses, which rely on community banks for lines of credit to expand.

Community banks provide a level of personal service entrepreneurs can’t find with large financial institutions.

Banking consolidation presents another challenge, with giant institutions like JPMorgan Chase gobbling up smaller players. This gives big banks even greater leverage to hold small businesses hostage with so-called “swipe fees.”

The Credit Card Competition Act

One piece of legislation that could help is the Credit Card Competition Act. As banks continue to consolidate, the bill would inject competition into the credit card market to provide a check on rising swipe fees for small businesses and consumers. The best part is that the legislation would apply zero additional government red tape to community banks that are already struggling to survive.

Furthermore, the Biden administration should stop playing favorites and recognize the critical role community banks play in supporting the backbone of the U.S. economy — small businesses.

We can’t leave them out to dry.

Continuing to play the blame game on Capitol Hill over the banking failures is an exercise in futility. Instead, lawmakers need to take concrete action to help the small businesses and consumers that are most threatened in the aftermath.

Let’s prioritize Main Street over Wall Street.

The post Op-Ed: After Bank Failures, Capitol Hill Blame Game Does Nothing to Help Small Businesses and Consumers appeared first on The Western Journal.