News and Commentary

Obama’s Big Government Crushed Again: Congress Passes Rollback Of Dodd-Frank

   DailyWire.com

On Tuesday, the House of Representatives voted to approve a regulatory rollback of the 2010 Dodd-Frank law, joining the Senate, which had approved the rollback in March. One result of the new legislation: fewer than 10 big banks in the United States will be subject to stricter federal oversight; thousands of banks with less than $250 billion in assets will not be considered systemically important to the financial system. Thus only banks with $250 billion or more will be subject to more regulations, including the Federal Reserve’s annual stress tests.

House Speaker Paul Ryan said the bill would lead to “freeing our economy from overregulation … Our smaller banks are engines of growth. By lending to small businesses and offering banking services for consumers, these institutions are and will remain vital for millions of Americans who participate in our economy.”

House Minority Leader Nancy Pelosi (D-CA) decried the bill’s passage:

Before the House voted on the bill, Senator Elizabeth Warren tweeted, “For years, armies of bank lobbyists & executives have groaned about how financial rules are hurting them. But there’s a big problem with their story — banks are making record profits. Congress has done enough favors for big banks — the House should reject the #BankLobbyistAct.”

But 33 Democrats voted for the bill in the House.

As Rep. Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, wrote in 2015 of the failures of Dodd-Frank:

Dodd-Frank was based on the premise that the financial crisis was the result of deregulation. Yet George Mason University’s Mercatus Center reports that regulatory restrictions on financial services grew every year between 1999-2008. It wasn’t deregulation that caused the crisis, it was dumb regulation. …

Before Dodd-Frank, 75% of banks offered free checking. Two years after it passed, only 39% did so. … Bank fees have also increased due to Dodd-Frank, leading to a rise of the unbanked and underbanked among low- and moderate-income Americans.

Dodd-Frank’s Volcker rule banning proprietary trading by banks, and other postcrisis regulatory mandates, has drastically reduced liquidity for making markets in fixed-income assets. … Because of Dodd-Frank, financial markets will have less capacity to deal with shocks and are more likely to seize up in a panic. Many economists believe this could be the source of the next financial crisis.