Sen. Kaufman: From “Aye” on Dodd-Frank to “Will Not Protect Us” in Just 2 YearsPosted by on July 24, 2012
Sen. Kaufman: From “Aye” on Dodd-Frank to “Will Not Protect Us” in Just 2 Years
For someone who voted for the Dodd-Frank Act, former Senator Ted Kaufman (D-Del.) sure doesn’t have many nice things to say about the massive 2,300-page law.
Marking the two-year anniversary of President Obama’s signing of the Dodd-Frank Act, Senator Kaufman used a guest column in The Hill to level strong criticisms against the law.
As to whether Dodd-Frank ended “too big to fail” (a claim made repeatedly by many supporters of the law), Senator Kaufman is direct in his assessment: Absolutely not.
He writes: “So are our largest banks still too big to fail? Of course they are.”
Not only did Dodd-Frank fail to end “too big to fail,” Senator Kaufman notes that the nation’s five largest banks are bigger today than they were when the financial crisis began.
Senator Kaufman is also dismissive of the much-hyped “living wills” that Dodd-Frank requires of large institutions and that are supposed to spell out how they would be wound down in a crisis. These “would be of little use in the real world.”
In the final analysis, after enshrining “too big to fail” and future bailouts into law, and after “leav[ing] the details” to regulators who “aren’t good at writing both the laws and the regulations,” Senator Kaufman concludes:
“It is clear to me that Dodd-Frank, however good its intentions, has not and will not protect us against another meltdown.”
If that’s the case, then what was the point?