Posted on 09/09/2012 11:31:57 AM PDT by Son House
Hijacking the Financial Sector: The Dodd–Frank statute represents a regulatory hijacking of the financial sector, spanning 2,300 pages delineating at least 400 separate rulemakings by 11 federal agencies.
Doesn’t Fix the Problem: Most of the provisions of the act have little or no connection to the financial crisis that provided the excuse for their creation.
More Bailouts, Not Less: Dodd–Frank does not end bailouts to big banks. Under the act, the Federal Deposit Insurance Corporation is permitted to purchase the assets of a failing firm, guarantee the obligations of a failing firm, take a security interest in the assets of a failing firm, and borrow on the failed firm’s total consolidated assets. (For Bank of America, that’s $2 trillion in bailout authority to be paid by taxpayers.)
Crippling Costs
Vast New Fees: Dodd–Frank will extract at least $27 billion in new fees and assessments on financial firms, according to the Congressional Budget Office. It will require more than 2.2 million annual labor hours to comply with the first 10% of rules issued (or, 56,516 work weeks).
Increased Consumer Costs: Dodd–Frank has increased the cost to consumers for financial services: The number of large banks that offer free checking has declined from 96% in 2009 to 34.6% in 2011.
Higher Costs for Homeowners: Mortgages and other home loans will likely be costlier, especially for moderate-income borrowers, because regulators are proposing unduly narrow criteria for a “qualified” mortgage—i.e., the portion of a mortgage loan that a lender can securitize.
Higher Bank Fees: The so-called Volcker Rule would effectively bar banks from investing their own funds. Lower earnings will undoubtedly increase service fees paid by consumers. Dodd–Frank also empowers the Federal Reserve to lower the fees that financial institutions may charge retailers for processing debit card purchases. The reductions in revenue have prompted higher fees on other banking services.
Less Innovation: Some of the rules required by Dodd–Frank will reduce liquidity in the market and thus inhibit innovation by limiting the amount of private capital available for investment.
Downgrades: Moody’s Investors Service recently cut the ratings of 15 of the world’s biggest banks, in part because of looming regulatory burdens. Community bankers are restraining growth to remain below the asset threshold at which more stringent Dodd–Frank rules kick in.
Unparalleled Power
No Accountability: The Consumer Financial Protection Bureau has been granted unparalleled powers without accountability. Because its funding is set in statute as a proportion of the Federal Reserve budget, the bureau is not subject to congressional control. Moreover, its status within the Fed effectively precludes presidential oversight.
Vague Authority: The legislation was written in vague terms, thus allowing Congress to delegate its legislative authority to regulatory agencies. More than half of the regulatory provisions in Dodd–Frank appear to be discretionary in nature, stating that agencies “may” issue rules or shall issue rules as they “determine are necessary and appropriate.”
New and Unnecessary Bureaucracy: The act will swell the ranks of regulators by 2,849 new positions, according to the Government Accountability Office. (The average salary at the Securities Exchange Commission is $147,595.)
These are Mitts kind of regulatory burdens. Vote Mitts.
Ugh.
This article doesn't even include the affirmative action rule which I understood were included in Dodd Frank.
What I understood was that the Gov't is now requiring affirmative action for top positions at Gov't entities like Treasury, SEC, the Fed, etc.
This also would include all private companies in contractal agreements with the Federal Gov't. Can you imagine all our financial institutions run by boards required to hire the requisite number of hispanics, women, transsexuals? Nightmare!!
Seems like we could just put the 37 page Glass-Steagall Act back into place.
* They are afraid to make loans for fear of getting gigged by what has not been filled in the regulation boxes W/ D-Frank.
* Business they know? sure, they will loan money to them, new start up? don't bother, go to the VC guys...
* Repeal D-Frank? don't look for a Romney recovery ASAP, In their humble opinion it will take 3 years to unwine D-Frank and folks will still be scared of it...
* Hated Credit Unions, CRDA doesn't apply to them and feels the playing field is not level. They wouldn't make loan's via the CDRA if they weren't mandated too. Never sees it being repealed, political suicide....
Welcome to the FUBARing of America...
Anything with Barney Franks name on it, is as fudged up as Barney’s sex life.
What a dolt.
Instead of passing Dodd Frank they should have reinstated Glass Steagall thereby separating commercial/retail banking from more speculative investment banking. The repeal of Glass Steagall created the “too big to fail” banks. If it were not for Glass Steagall Bush/Paulson/ and Bernanke could have just let Goldman, Morgan Stanley, Merrill Lynch and Lehman go down in 2008. If any of the commercial banks (Wachovia, Washington Mutual, Wells Fargo, JP Morgan Chase, or Citibank had been insolvent, they could have been restructured in a normal bankruptcy with the retail depositors covered by FDIC insurance while the shareholders, bondholders and management would have taken the hit instead of the taxpayers.
As long as the banking system is structured to allow investment bankers to speculate with the savings of the middle class, with the government backstopping the speculators in the event they blow everything up, we will not have a sound economy. The contempt the investment bankers showed the taxpayers in 2008/2009 begging for bailouts and then turning around in 2010/2011 paying themselves record bonuses was deplorable.
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