Dodd-Frank Fifth Anniversary Round-Up
Washington,
July 27, 2015 -
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| Dodd-Frank turns 5: What mess |
…what Dodd-Frank actually did was to deliver yet another massive government intervention to cover up the lies of past government interventions that directly led to last decade's economic meltdown.
…What an absolute mess. And it's exactly what you get when, instead of protecting the marketplace, government attempts to command it.
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| Five Years in, Dodd-Frank Hasn't Accomplished Much |
The current banking data seem to point to the fact that Dodd-Frank has not cleared up the problems it attempted to address. In fact, one could argue that in many areas, the situation is still somewhat fragile.
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| ‘Celebrate’ Dodd-Frank’s Anniversary By Fixing It |
When it works well, bank regulation helps ensure the safety and soundness of the overall banking system. But when it doesn’t -- as with significant parts of Dodd-Frank – it constricts our economy, consumers and small business lending and job growth.
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| Dodd-Frank at 5 -- helping big banks get bigger |
…all this government-mandated busywork has helped the industry's largest players, the too-big-to-fail banks that caused many of the problems, run roughshod over their smaller competitors.
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| Local banks feeling weight of Dodd-Frank |
Banks across the country, including those doing business in northeast Indiana, are still struggling to absorb costs of complying with the 398 new rules spelled out over thousands of single-spaced pages.
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| 5 Numbers To Know As Dodd-Frank Wall Street Reform Celebrates Its 5th Birthday |
The five biggest banks control 44 percent of all U.S. banking assets — more than before Dodd-Frank was enacted…That creates the preconditions for a catastrophe…
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It's been 5 years since Wall Street got hit with Dodd-Frank and not much has changed
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…even the most favorably inclined observer would have to acknowledge that Dodd-Frank hasn’t done a terribly impressive job.
Dodd-Frank didn’t even touch the major proximate source of the crisis: housing finance.
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| Dodd-Frank at Five Years, No Victory Laps Please |
The regulatory system that emerged from Dodd-Frank, moreover, remains highly balkanized, a regret Mr. Frank acknowledged in his interview with the WSJ. The law created new institutions, such as the Financial Stability Oversight Council and the Consumer Financial Protection Bureau, without consolidating old ones like the Securities and Exchange Commission and Commodity Futures Trading Commission.
This thickening soup of regulatory agencies is one reason why so many Dodd-Frank rules are taking so long to get written.
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| Dodd-Frank at 5 Years Old: Making The Next Crash More Likely and Worse When It Happens |
That’s just fantasy land. You don’t reduce risk by concentrating it. What you’ve done there is concentrate risk, as the word suggests. And that doesn’t reduce risk in the slightest. If it did then we’d never be talking about risk pools for insurance, would we?
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| Five years later, Dodd-Frank still falls short |
This "too-big-to-fail" status allows the banks to borrow more cheaply than their inadequate capital cushions would otherwise allow -- an implicit subsidy that benefits their executives and shareholders. Judging from recent research by economists at the New York Federal Reserve, the subsidy has so far survived Dodd- Frank's efforts to eradicate it.
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Financial reform at 5: Some gains,
big disappointments |
Half a decade later, the big banks are even bigger, former U.S. Rep. Barney Frank (a co-crafter of the financial reform bill) sits on a bank board, and former Attorney General Eric Holder now represents the same big banks he couldn’t prosecute because he said that they had “become too large.”
…its potential to prevent another financial calamity for the millions of workers who live paycheck to paycheck remains largely unfulfilled.
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| Five years after Dodd-Frank, time for a course correction at CFPB |
…Dodd-Frank has ended up contributing to an unprecedented interference in the free market and reductions in personal privacy and consumer freedom - more than any other single piece of legislation.
The law’s most significant achievement – the creation of the Consumer Financial Protection Bureau (CFPB) – has become the poster child for nanny state government, domestic spying and a lack of transparency and accountability that’s nothing to celebrate.
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| Birthday wish for CFPB: Get real |
The agency's original mission was to make the auto finance business more consumer-friendly. But understanding how it measures things, and the menu of options it considers, I'd argue it's done the opposite.
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| Dodd-Frank Just Entered Kindergarten |
Dodd-Frank has also been blamed for hurting community banks, which are important to small businesses and economic growth, the drivers of job creation. These smaller banks are typically the only financial institutions in an estimated 1,200 U.S. counties. Even though they had nothing to do with the financial crisis, they got caught up in the rush to regulate, in the “one size fits all” answer the government came up with.
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| Dodd-Frank’s impact on access to credit |
Well, before 2009, our local financial marketplace was served by companies like Wachovia Bank, Carolina First Bank, Liberty Savings Bank, RBC/Centura Bank, BankMeridian, Harbourside Community Bank, Beach First Bank, Woodlands Bank and First Federal Bank. All those names have disappeared, to be replaced by Wells Fargo, TD Bank, South State, PNC Bank, Ameris Bank, BNC Bank and, who can forget, Bank of the Ozarks. The score: nine banks gone and seven new names on the front door. We replaced seven “community banks” with at least four “new” banks, each with assets in excess of $10 billion — hardly “community banks.”
This suggests that the biggest American banks are getting bigger while community banks, hardly bad actors in the financial crisis, are bearing much of the pain.
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| Happy 5th birthday Dodd-Frank Act The law has done more harm than good for consumers |
These potential borrowers aren’t being denied mortgage loans because they can’t afford them; rather, the community banks that would normally offer them a loan simply aren’t in the business of lending anymore.
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| Time to revisit Dodd-Frank law |
…this remains the weakest economic recovery since World War II.
From our free-market perspective, Dodd-Frank went way too far, in particular by imposing heavy new bureaucratic structures, such as the Consumer Financial Protection Bureau, that raised business costs. Local banking officials have told us federal financial filings, in some case, have become five times as voluminous.
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Five years after Dodd-Frank, community
banks need relief |
Here in Illinois, we have seen and heard it all. Community banks are finding it harder to keep their doors open to serve their communities. The Illinois Bankers Association has hosted numerous trips for its member banks to go to Washington, D.C., to have frank discussions with lawmakers and provide real-world examples of increased regulatory burden and its effects.
…A new regulation or a bill in Congress may not come with an actual price tag, but banks have to hire new staff and outside contractors to help them navigate a world with so many new regulatory landmines. Those costs function as a hidden federal tax on bank customers.
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| Fix the Dodd-Frank law |
Here in Florida, we have seen banks cut lending positions and customer service staff in order to hire compliance officers. We have also seen consolidations in the banking industry because efficient compliance requires economies of scale and it is becoming more and more difficult to operate as a smaller institution. Furthermore, we have had no new banks opening in part because of the restrictive operating environment.
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| Dodd-Frank is hurting consumers and the economy; it needs a complete overhaul |
What happens when Main Street businesses can’t get commercial loans or lines of credit or no longer have access to a market for corporate bonds?
It becomes harder to buy equipment, purchase seasonal inventory, manage payroll or even keep the lights on.
Consumers are also impacted. Without access to a variety of financial tools, Americans wouldn’t have the opportunity to get ahead—to go to school, own a home or buy a car to get to work—and, in turn, power our economy.
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