Onerous DODD-FRANK Regulations to be Undone

Restrictions that have been intended to protect consumers have been so burdensome for banks and Wall Street, that it has ultimately hurt consumers- the very group that the legislation intended to help!

Banks are incurring hundreds of billions of dollars with regulatory costs every year. Without those costs banks could offer better choices and better products to the American Consumer. Also offer better prices that can be more efficient and effective for all of us.

Starting this April, the Obama Administration’s new rule, which orders retirement advisors to act in the best interest of their clients, will place even more burdens on Advisors (who by the way did not create the financial crisis of 2008 in the first place) and will incur terrible regulations by adversely affecting investors’ ability to access financial advice, rather than empowering US investors and enhancing the competitiveness of US companies.

Perhaps the government should look at themselves in the mirror as that created an incentive to give mortgages to consumers that could not pay them back, but due to the Community Reinvestment Act (CRA), the banks were forced at gunpoint to lax lending standards and to lend to unqualified borrowers or else pay punitive damages. The regulations even encouraged “no money down mortgages” as not to be accused of unfair lending practices. Psychotic, I know.

Now, regulations put into place by Dodd-Frank are so sweeping that is too hard for banks to lend and consumer choice is too limited. Many consumer groups, along with Democrats, have pushed for tighter controls on lenders and banks after the subprime mortgage crisis.

But many of the post crisis rules have not solved any problems or addressed those problems. For example, there is no access to short term liquidity or a way to safely and orderly wind down a large financial institution right now. Trump has been quoted that he wants to upend Dodd-Frank rules it as a “disaster”.

Some of the rules that will be put in place require public companies to disclose so much information, that they become uncompetitive in the world market. For example, public global companies have to disclose payments they make to foreign governments when developing resources in that particular country.

Well, Dodd-Frank is the law right now and regulators have a limit to what they can do. The House Republicans are now emboldened and are moving to repeal and replace. They would need 60 votes to accomplish that. And they are considering ways to use budget process to defund many aspects of the law.

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