Dodd/Frank Banking Bill : Expanding Bad Regulations

There is little doubt in the financial community Dodd/Frank is a disaster for financial institutions and the general public. It is just more of the same, more regulations based on assumptions that have no relevance to reality. The Dodd/Frank bill only makes a bad situation worse in that the two authors didn't seem to have learned anything from their horrendous mistakes over the last two decades.

The Community Reinvestment Act was dreamed up by Chris Dodd and Barney Frank which caused the housing bubble which  in turn destroyed the lives of millions and our entire economy. We are still suffering from that disaster as the progressive liberal Democrats refuse, can't understand the need for economic responsibility.

Will Dodd-Frank Help or Hinder?
Source: Hester Peirce, "It's Time To Ask If Dodd-Frank Will Help, or Hinder?" Real Clear Markets, August 28, 2013.
September 6, 2013

President Obama recently met with the top regulators to talk about financial reform. Given the daunting amount of Dodd-Frank implementation work on regulators' plates, a presidential pep talk was in order. In addition to words of encouragement for the weary regulators, the discussion ought to have included some soul-searching and tough love, says Hester Peirce, a senior research fellow at the Mercatus Center at George Mason University.

Discussions about whether Dodd-Frank should be changed and how it should be implemented must include the full range of opinions. That's where the tough love comes in. Critical voices need to be part of the debate. Those who want to silence everyone but representatives of the "public interest" seem to define that category based on their favored policies.

• Financial regulators cannot simply refuse to consider concerns raised by the financial industry.
• Policymakers need input to inform themselves of the likely consequences of their actions.
• They do not -- and cannot -- fairly be expected to have all of the knowledge necessary to understand how their rules will reshape the marketplace.

Sometimes even well-intentioned people in positions of great power are not operating on accurate information. The consequences can be small or large, as in the case of the harm wrought by Dodd-Frank regulations promulgated without adequate input from affected people and companies.

We should pause to ask fundamental questions about Dodd-Frank's efficacy and discuss whether regulatory agencies are following good rulemaking practices that allow for broad, transparent input, rulemaking might be slower than some would prefer, but it should yield a genuinely better result -- one that will achieve the desired outcome while keeping undesirable fallout to a minimum.