Seeds for a communist revolution full tilt.
The Tparty has been saying it for ever, that TARP et al. were going to reward bad behavior and, chiefly, the one of the very government legislation that threatened banks which did not want to take risks with people obviously incapable or lying on their loan applications.
Let me tell you what our bank's Senior Management has already told us after working with the regulators recently and that is this: If you thought the damange from the 2008 market crash driven by the Lehman Brothers collapse in 2008 was bad, wait until the Dodd-Frank regulations are finally "interpreted" by the Fed's and passed down to the banks.
The credit freeze that happened after Lehman Brothers will pale by comparison to what Dodd-Frank is going to do to small to medium sized business lending.
Want to know why Bank's aren't lending as much as they used to? Blame the regulators. When the Banking Regulators come in for an examination, one of the things they examine is our loan portfolio. They review each loan for risk and force the Bank to take action based on their findings.
Here's where the problem starts: Regulator A will review the loan profile and see nothing risky, close the audit and leave. Regulator B comes in 6 months after Regulator A left, reviews the same loan profile and magically "discovers" some unseen risk in the Bank's loan profile, and then requires the Bank to increase it's capital reserves to cover the magically discovered risk, which then reduces the amount of money the bank has to loan out.
Forget the fact that Regulator A passed the loan profile with no to low risk, Regulator B "has to find something" to justify their existence.
This is happening ALL OVER THE COUNTRY, the ones most hurt are the small to medium sized banks and community banks. I've lost count of the number of friends I have in I.T., Risk Management and Loan Operations here locally that have told me the same thing.
Dodd-Frank is going to make this problem INFINITELY WORSE as the new regulations are interpreted, re-interpreted, challenged, etc.. Dodd-Frank if it goes into effect is literally going to "lock up and freeze" lending in this country, no matter how good one's credit score is for the retail borrower, or small to medium sized business owner.
In short, Dodd-Frank is an economic GROWTH KILLER.
(We've had three visits by the regulators in the last three years BTW. They're on-site for 4-6 months each time. Talk about an exhausting examination, they make the TSA seem efficient by comparison.)
The Constitution does not authorize the government to function as an insurance company.