New bill to remove, revise Dodd-Frank rules imminent

[BoomerFan]

New bill to remove, revise Dodd-Frank rules imminent

The Dodd-Frank Act and its consumer protection authority took another blow this week.

Jeb Hensarling (R-Texas), chairman of the House Committee on Financial Services and a critic of the banking law, has sent a memo earlier this week to the committee leadership, outlining his plans to introduce a new version of his legislation to quash many bank regulations and regulators’ enforcement authority in Dodd-Frank, according to a copy of the memo obtained by USA TODAY.

Last year, Hensarling introduced the Financial Choice Act, which aimed to remove some regulations in Dodd-Frank that the industry considers burdensome and costly. President Trump also issued executive orders last week to roll back key financial regulations of the Obama era.

Dodd-Frank, passed in 2010 following the financial crisis, created the Consumer Financial Protection Bureau and established a wide array of rules on banks and financial services companies, including tests for liquidity and capital soundness, limits on predatory lending, and curbing certain types of trading activity.

Emboldened by Trump’s actions, Hensarling now proposes changes to his earlier bill, the Financial Choice Act, that mirror key bullet points in the financial industry’s lobbying on Capitol Hill.

“This new version of the Chairman (Hensarling's) Wrong Choice Act is even worse than the original," according to a statement from Rep. Maxine Waters (D-Calif.), the Ranking Member of the House Committee on Financial Services. "This bill makes it crystal clear that Republicans mean to disarm our consumer protections, expose the American public to financial predators, and ultimately steer us in the direction of another Great Depression."

*Weakening CFPB’s reach. Hensarling is looking to limit the CFPB's enforcement powers to cease-and-desist orders and subpoena powers. He also wants to eliminate the CFPB's consumer education functions and repeal its databases containing consumer complaints. The agency has received more than 1 million complaints since 2010.

*Loosening banks’ requirements. Hensarling’s bill would remove the Federal Deposit Insurance Corporation from a review process to determine banks’ readiness in case of a recession, the so-called "a living will." Currently, large banks are required to submit a living will to the Federal Reserve and the FDIC, describing their strategy for “rapid and orderly resolution in the event of material financial distress or failure of the company.”

Paving the way for another 2008 style financial crisis is scary to me. A lot of things presidents or a congress does won't necessarily impact us personally, but the financial crash certainly did and I am very much against the moves being made now.

[Belsnickel]

It's unfortunate that we can't seem to escape this cycle of not learning our lessons. From G-S, to GLBA, to Dodd-Frank, and now whatever will happen next.

[THE Bigzoman]

Belsnickel,

Trump's directive is ambiguous. It only says parts of Dodd-Frank will be rolled back. Your doom and gloom is premature unless you think the law in its entirety prevents another crisis.


2. We may be headed for another crisis regardless of what happens with Dodd-Frank.

The reality of our financial markets is that they're controlled mostly by a small number of firms. Said firms' behavior is what contributed to the financial crisis, yes. But the fact that they had so much market power to begin with never registers with people. Dodd-Frank made the situation worse by making it harder for small banks to compete.

http://www.syracuse.com/news/index.ssf/2010/10/say_goodbye_to_traditional_fre.html
https://www.washingtonpost.com/business/capitalbusiness/four-years-into-dodd-frank-local-banks-say-this-is-the-year-theyll-feel-the-most-impact/2014/02/07/12c7ca48-877e-11e3-a5bd-844629433ba3_story.html?utm_term=.c5c6c8e09728
http://www.forbes.com/forbes/welcome/?toURL=http://www.forbes.com/sites/carriesheffield/2015/02/09/dodd-frank-is-killing-community-banks/&refURL=https://www.google.com/&referrer=https://www.google.com/


Economies change all the time. If you think the government can adapt to said changes, you're ignoring how flabbergasted they were in 2008.

A better solution might be to reduce the size, complexity, and market power the biggest players have. Better than giving the tops dogs more market power than they had before the crisis.

[Benton]

(02-12-2017, 12:52 PM)Belsnickel Wrote: It's unfortunate that we can't seem to escape this cycle of not learning our lessons. From G-S, to GLBA, to Dodd-Frank, and now whatever will happen next.

I'm taking a wait and see.

parts of it needed to be taken out because it didn't differentiate much between mega banks (that were significantly responsible for our last meltdown) and small banks where a significant part of the population does business. The regulations hurt those banks and their ability to compete with the bog banks.

of course, since trump needs those mega banks to loan him money, I'm not optimistic. But I am hopeful.

[NATI BENGALS]

You know Trump. He is fighting for the forgotten ones. Like the oil companies and white supremacists. But most of all the American people he forgot about who got totally railroaded during the great recession and lost life savings and retirement funds.

These poor banks have really struggled as the American economy recovered. Tisk tisk. We need more foreclosures and predatory lending. The right people are being put in place to make it happen. Just give it time be patient and see what they do is what Im told is the sensible thing to do.

[Belsnickel]

(02-12-2017, 08:21 PM)THE Bigzoman Wrote: Belsnickel,

Trump's directive is ambiguous. It only says parts of Dodd-Frank will be rolled back. Your doom and gloom is premature unless you think the law in its entirety prevents another crisis.


2. We may be headed for another crisis regardless of what happens with Dodd-Frank.

The reality of our financial markets is that they're controlled mostly by a small number of firms. Said firms' behavior is what contributed to the financial crisis, yes. But the fact that they had so much market power to begin with never registers with people. Dodd-Frank made the situation worse by making it harder for small banks to compete.

http://www.syracuse.com/news/index.ssf/2010/10/say_goodbye_to_traditional_fre.html
https://www.washingtonpost.com/business/capitalbusiness/four-years-into-dodd-frank-local-banks-say-this-is-the-year-theyll-feel-the-most-impact/2014/02/07/12c7ca48-877e-11e3-a5bd-844629433ba3_story.html?utm_term=.c5c6c8e09728
http://www.forbes.com/forbes/welcome/?toURL=http://www.forbes.com/sites/carriesheffield/2015/02/09/dodd-frank-is-killing-community-banks/&refURL=https://www.google.com/&referrer=https://www.google.com/


Economies change all the time. If you think the government can adapt to said changes, you're ignoring how flabbergasted they were in 2008.

A better solution might be to reduce the size, complexity, and market power the biggest players have. Better than giving the tops dogs more market power than they had before the crisis.

One, this is about what Congress does, Trump. What the final result will be from Congress we do not know at this point.

Two, doesn't mean we need to make it easier to engage in behaviors that facilitated the previous recession.