WASHINGTON — Rep. Jeb Hensarling, one of the top candidates to assume control of the House Financial Services Committee next year, sharply criticized the Dodd-Frank Act, saying it had severely damaged financial institutions.

Speaking to the National Association of Federal Credit Unions' annual congressional caucus, Hensarling also blasted the creation of the Consumer Financial Protection Bureau, arguing it has too much unchecked authority.

"I do believe that, regrettably, you have been victimized by a legislative drive-by shooting known as Dodd-Frank," Hensarling said, to industry applause.

The Texas Republican critiqued President Obama's optimistic outlook when the law was passed in 2010.

"The president said when Dodd-Frank was passed that it would 'lift our economy,' 'give certainty to everybody' and 'end taxpayer bailouts,'" Hensarling said. "Two years later we remain mired in the worst economy since the Great Depression, 'too big to fail' is enshrined into law" and capital markets must still contend with "Dodd-Frank's confusing, complex and voluminous rules."

He added that part of the problem was an unnecessary focus on regulation to fix the country's problems.

"If you have the wrong diagnosis, you tend to get the wrong remedy and that is what we seen in Dodd-Frank," Hensarling said.

"Do we want to live in a society that manages risk out of the system? In the not too distant past, one of the large investment banks took a risk on Apple as it was floundering. Now Apple is one of the most valuable companies in the world and its products have revolutionized our lives and our economies. We should not seek to end risk. It's simply a need to manage risk."

Hensarling also reiterated his concerns over the scope of the CFPB.

"How you can take away the fundamental economic liberties of Americans and give unfettered subjective powers to one unelected, unaccountable bureaucrat to fundamentally decide what credit cards go in our wallets, what mortgages you can have is positively Orwellian," he said. "Unless we reform this institution, consumer credit will be effectively trashed. The cost of it will go up, and there will be less of it."

A member of the Simpson-Bowles deficit reduction commission and the bipartisan congressional "super committee" that never reached an agreement on alternatives to scheduled spending cuts last year, Hensarling also discussed the "fiscal cliff" and its potential impact on the country.

"The first immediate challenge we have in public policy is the so-called fiscal cliff, which I think is more accurately described as a national defense cliff and the tax cliff," Hensarling said.

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