Dodd-Frank and the Status of Financial Regulation in Post-Crisis United States

WASHINGTON - JULY 21: U.S. President Barack Obama signs the Dodd-Frank Wall Street Reform and Consumer Protection Act at the Ronald Reagan Building July 21, 2010 in Washington, DC. The bill is the strongest financial reform legislation since the Great Depression and also creates a consumer protection bureau that oversees banks on mortgage lending and credit card practices. Also pictured (L-R) are Vice President Joe Biden, Speaker of the House Nancy Pelosi (D-CA), Senate Majority Leader Harry Reid (D-NV), Rep. Maxine Waters (D-CA), Sen. Chris Dodd (D-CT) and Rep. Barney Frank (D-MA). Photo by OwenDB/Black Star***
Barack Obama, depicted, signed the Dodd-Frank Wall Street Reform and Consumer Protection Act at the Ronald Reagan Building on 21 July 2010. Since its passage five years ago, the results have ranged from “massive disappointment” to “complete disaster”.

When nations misdiagnose the causes of a particular problem, the proposed solutions often lead to negative unintended consequences. The most famous example of this is the Great Depression, when a series of government programs aimed at stimulating aggregate demand turned a sharp market correction into a 17-year downturn. One can fast forward 70 years to find the same trend presenting itself once again. Overregulation of the mortgage industry starting in 1992,  implementation of Basel II reserve ratio requirements in 2004, and expansionary monetary policy from the Federal Reserve starting in 2001 all joined to produce a housing bubble sized at $10 trillion that popped in 2008, causing a contraction in US GDP by 4.3%.

A pragmatic policy maker views these causes and seeks to mitigate them in the future.  The Consumer Protection and Regulatory Enhancement Act, introduced by Spencer Bachus III and sponsored by many Republicans, sought to change the role of the Federal Reserve to focus on price stability and revoke the federal charters of Fannie Mae and Freddie Mac, government-sponsored enterprises which underwrote many subprime mortgages to enforce the aforementioned federal regulations. The proposal rectified two of the three major issues that caused the housing bubble in the first place. Unfortunately, the bill did not pass, as left-wing politicians saw the crisis as an opportunity to consolidate power in government. They blamed the crisis on “reckless deregulation”, when the opposite actually occurred.

Two prominent Senators, Chris Dodd and Barney Frank, introduced the Dodd-Frank Wall Street Reform and Consumer Protection Act on 2 December 2009, which currently serves as the largest government intervention in the financial industry since the Banking Act of 1933. The law radically changed the regulations for financial institutions and derivatives trading. While Dodd-Frank was implemented to increase market stability and minimise systemic risk, the result has been the opposite.

The most noticeable rule in the juggernaut among consumers is known as the Durbin amendment, which places price controls on the fee that retailers pay when customers utilise a debit card. This has triggered a shift in the cost to maintain payment card systems from retailers to consumers. Before the law was passed, 76% of all banking accounts were eligible for complimentary checking. Due to the rule, only 38% qualified in 2014. The Durbin amendment has contributed to a growing crisis of unbanked populations in the United States, with an estimated 10 million households resorting to costly checking cashing and payday loan facilities.

One agency created by the law is the Financial Stability Oversight Council (FSOC), which claims to implement regulation to decrease systemic risk in the market. In the FSOC’s 2015 Annual Report, the majority of the major risks outlined are the result of either Dodd-Frank itself or misinformed government policy. The most prominent delineation is the lack of “housing finance reform”. In a case of disturbing cognitive dissonance, the FSOC praises Fannie Mae and Freddie Mac for again providing affordable housing, however it also harshly criticises an increased level of mortgage industry risk. At the very least, the report does finally admit that the liquidity support programs dispersed in the Emergency Economic Stabilisation Act of 2008 has led to a rise in moral hazard. Other than that isolated statement, however, the FSOC has only created another burden in the finance industry without providing any actual benefit.

Another mess is the regulatory environment governing systemically important financial institutions (SIFIs). If a firm is found to be integral to the function of the US financial system (“too-big-to-fail”), then the FSOC will implement capital, leverage, and liquidity requirements. While originally intended for banks, the scope of the regulations has already expanded to include AIG, GE Capital, and Prudential Financial. To make matters even worse, the Council is also considering the inclusion of mutual fund firms such as BlackRock, Fidelity and PIMCO. These burdens have greatly increased inefficiency to the point that MetLife, another firm awaiting SIFI designation, has filed several lawsuits and GE Capital is in the process of a spinoff to decrease inhibiting levels of overhead.

The most important rule, and perhaps the most infamous, is the Volcker rule, which places a ban on proprietary trading by financial institutions. The rule is not just misguided. It will serve as a catalyst for the next financial crisis. Bank analysts and even some regulators have become increasingly concerned with a lack of liquidity in fixed-income asset markets, particularly that of corporate bonds. This has already resulted in a surge in market volatility, demonstrated by the upward trend of the the VIX over the past several months. This instability can quickly place global markets in a quagmire when the current US equity bubble bursts.

As stated in previous posts, the next financial crisis should be an opportunity for sound regulatory reform, not a window of cheap political gain. When it hits, regulators will first blame financial markets and demand more control over them. Based on this current set of laws, the United States will need to learn its lesson, as it clearly failed to do so after the 2000s housing bubble. The push for government consolidation of markets must be resisted and replaced with a policy that promotes long-term economic stability.


67 thoughts on “Dodd-Frank and the Status of Financial Regulation in Post-Crisis United States

  1. Jellin' with Yellen October 17, 2015 / 8:18 pm

    Vega hits it right on the money – once again! Let’s be clear. Government “management” of credit markets is based on political rather than economic decisions, and those are made by second raters at that, so it’s government bureaucrats and politicians trying in vain to simulate the disciplines of free market signals while simultaneously distorting those same signals is an utter failure. But we never learn.

  2. Ed BERRY October 17, 2015 / 8:18 pm

    Well Wall Street PAID Washington Democrats to make the rich…PERFECT SUCCESS. So what if savers have been KILLED….as long as Corzine and his ilk stay out of jail and get very rich with unlimited zerorate taxpayer money. Democrats have done very well…just ask Geithner, Orzag, Clinton, Corzine, Bernanke, etc Heck even Dodd has made millions selling out the American people The buy your democrat Wall Street way has worked very well for the likes of Soros, Blankfein, Dimon and Buffet

  3. JP MONEYBAGS October 17, 2015 / 8:19 pm


  4. Tom Topar October 17, 2015 / 8:19 pm

    Obama made up the three stooges with Dodd and Frank when he appointed the two stupidest available to write the banking laws they prostituted along with Clintons help. Those two threw every political road block they could in front of Geo. W. when he wanted to audit Fannie and Freddy in 05 which would have given a early warning to the pending problems. Then the laughable “smartest guy in the room” a Chi town politician with ZERO credentials, educational records, or back ground chooses to forget that democrats as a group and Larry and Curly in particular were the cause of the worst depression since the thirties and sends those two on a mission.—Stupid is as stupid does.

  5. Darren D Miller October 17, 2015 / 8:22 pm

    Dodd, Frank and Waters in the same photo. The very people who helped cause the financial crisis.

  6. Rick8412 October 17, 2015 / 8:22 pm

    Actually the implemetation of Dodd Frank has been stonewalled by Wall Street , Regulators , and republicans since it’s inception . Zach V. needs to get his facts straight . Wall street seems to advocate ,” If We Ain’t Cheating , We Ain’t Competeing .”

    • Tom Topar October 17, 2015 / 10:15 pm

      Actually you’re wrong. Dodd Frank has been a dismal failure exactly as the article described. It has resulted in over tight credit, community banks shutting the doors rather than hire a plethora of lawyers to decipher what the two fools wrote and Obama signed, and spawned the next group of anti American no nothings lead by the Warren and deBlasio ilk. The banks conducted business economically and with oversight until the democrats took up the “every unqualified deadbeat should one a home mantra” and Clinton signed it.

  7. Albert Colmes October 17, 2015 / 8:22 pm

    We’d expect bankers to run banks well & honestly thru a storm of socialist manipulation but they didn’t.
    We can expect the socialists to run the entire financial system to ruin. They have a great track record for that. And we know that they’re dishonest. We need to pray that they will mess up as badly as the bankers.

  8. William Thayer October 17, 2015 / 8:24 pm

    He is right that Dodd-Frank is a failure, but misses the main point why. There are still $700 Trillion of Derivatives in existence and most serve no risk transfer function at all.

    • Tom Topar October 18, 2015 / 4:25 am

      They’ve been dubbed financial weapons of mass destruction, attacked for causing the financial turmoil sweeping the nation and identified as the kryptonite that brought down the global economy. Derivatives have become the universal symbol of Wall Street greed, yet few Main Streeters really know what they are—namely, financial contracts between a buyer and a seller that derive value from an underlying asset, such as a mortgage or a stock. That hasn’t stopped public opinion from turning forcefully against them. Most experts believe that Barack Obama needs to put an end to the financial alchemy that turned low-quality mortgages into trillions of dollars of high-priced derivatives. There seems to be near consensus that derivatives were a source of undue risk.

      And then there’s Robert Shiller. The Yale economist and financial soothsayer believes just the opposite is true. A champion of financial innovation and an expert in management of risk, Shiller contends that derivatives, far from being a problem, are actually the solution. We need more of them, not less, he says, and warns about the dangers of misguided regulation (though he agrees some regulation is vital). Shiller has an impressive track record of getting real-world things right. He published “Irrational Exuberance,” which became a bestseller, just as the stock-market bubble burst in March 2000. He was eerily prescient in sounding the alarm about the housing bubble and the effects of its bursting on global financial markets.

      What separates Shiller from the majority of economists is his lack of faith in the “efficient-market hypothesis.” That belief, which also guides the hand of most money managers, holds that the market will price assets according to their fundamental value and that those prices reflect all pertinent information. Shiller instead follows those, like John Kenneth Galbraith, who hold that market prices reflect “animal spirits” and popular passions, not perfect information. That is why bubbles form, and that, for Shiller, is why financial innovation, and not just government regulation, is imperative.

      For all the trillions in derivative trading, there were very few traders. Almost all the subprime mortgages that were bundled and turned into derivatives were sold by a handful of Wall Street institutions, working with a small number of large institutional buyers, ranging from the Bank of China to HSBC to sovereign wealth funds. And as we now know, these derivatives were black boxes whose contents were known by neither the sellers nor the buyers. It was a huge but illiquid and opaque market.

      In essence, Shiller is laying the intellectual groundwork for the next financial revolution. We are now suffering through the first major crisis of the Information Age economy. Shiller’s answers may be counterintuitive, but no more so than those of doctors and scientists who centuries ago recognized that the cure for infectious diseases was not flight or quarantine, but purposely infecting more people through vaccinations. “We’ve had a major glitch in derivatives and securitization,” says Shiller. “The Titanic sank almost a century ago, but we didn’t stop sailing across the Atlantic.”

      Of course, people did think twice about getting on a ship, at least for a while. But if we listen only to our fears, we lose the very dynamism that has propelled us this far. That is the nub of Shiller’s call for more derivatives and more innovation. Every major crisis in capitalism is met by calls to return to an earlier, mythic time when life was more secure and things were better. Shiller’s appeal is a tough sell at a time when derivatives have produced so much havoc. But he reminds us that the tools that got us here are not to blame; they can be used badly and they can be used well. And trying to stem the ineffable tide of human creativity is a fool’s errand.

  9. Newport89 October 17, 2015 / 8:26 pm

    Does anybody know where one can find the number of families who lost their “affordable” house because they couldn’t afford them. Government has ruined many more lives than it has helped with its housing policy.

  10. Theo Muller October 17, 2015 / 8:27 pm

    In 2010 a small Florida bank in trouble forgave a loan guarantee in return for a cash investment of about 50% of the guarantee. That deal was approved by the bank’s credit committee. At the end of 2011 the bank was taken over by the FDIC.

    In 2013 the FDIC then sued the guarantors, using the argument that Dodd-Frank allows the FDIC to discard written agreement by banks it has taken over. The lawyers advised the guarantors to settle and to pay the FDIC a second time as Dodd-Frank has eviscerated US contract law.

  11. Sally Huynh October 17, 2015 / 8:28 pm

    So many communist in one place,

    That photo is so awe inspiring to marxist all over the US in San Fran and New York.

  12. WILLIAM GET REKED MAN! October 17, 2015 / 8:29 pm

    Dodd-Frank is a failure, wake up folks!

    Quit voting for Democrat’s and Rhino’s! Or I will find you and set you straight!

  13. Peggers+ October 17, 2015 / 8:29 pm

    Yes. Its a partisan Democratic bill. OF COURSE ITS A FAILURE. Anything the Dem’s have done, has failed, from the increased debt, to no border, no defense, allowing open season on Americans at home and abroad, keeping close track of Conservatives while terrorists are free to engage in US terror, the LAUGHABLE ‘foreign policy’, the increased racism, decreased law enforcement leading to riots, pillaging, looting, and burning in US streets, and A HORRIBLE SHOVE IT DOWN YOUR THROAT HEALTHCARE SYSTEM. The Democratic Religion of Zealots have added nothing but problems, ideological failures, stonewalling, and lies and a Greek like Economic aspect to the US. We need a return to enforcing our laws, and decreased Government especially unchecked Federal Agencies with agendas….

  14. David Anders October 17, 2015 / 8:29 pm

    What has happened in our nation? How do we have these brainless politicians in power? How did so many alleged liberals buy into the socialist utopia? Are these inept politicians to blame, or is it the people who put them in office? We need to teach laissez-faire capitalism in our schools and universities. Academia has for decades attacked our free market philosophy and corrupted our students’ faculty by embracing socialism and demonizing capitalism. It’s paying off in spades, to our detriment. We must fight back against socialism and fight for free markets everywhere. If we do not, we surrender to the inept and brainless (see pic above).

  15. David Anders October 17, 2015 / 8:31 pm

    Barney Frank was the sole reason for the financial crisis by demanding that banks make loans to unqualified borrowers, via Fannie Mae and Freddie Mac. The distortions of more government oversight only leads to bigger trouble ahead. Case in point, how many times did the SEC sign off on Mr. Madoff (six times)? The excessive hand of Government leads to greater inefficiencies, greater misallocations of resources, and greater inequalities.

  16. john kulak October 17, 2015 / 8:31 pm

    Let’s remember that the Bills namesake and sponsors should be in jail themselves for a host of ethics violations if not criminal ones.

  17. Free Market Fighter October 17, 2015 / 8:31 pm

    Is anyone truly surprized? After the VA, Obamacare, the Depth of Education…is anyone else surprised that Dodds Frank is an epic failure?
    Repeal it along with the CFPB.

  18. Kevin Dretzka October 17, 2015 / 8:32 pm

    Not one person in the photo spent a minute in the financial services industry. I suspect few completed a single economics or basic finance course. This law is a political posterior cover which does not even fight the last war.

  19. Michael Bromley October 17, 2015 / 8:33 pm

    Thank you, Zach Vega, for explaining to me why I have to add a stupid, superfluous and annoyiong $15 a month line item to my business checking account. I mark it “Cap One/ Bank Fee / memo: [expletive deleted]. It cropped up sometime last year, so I as a consumer had no forewarning nor any sense of empowerment to fight it. In fact, I’d pay them $25 a month just to get rid of it. Seriously.

    On another note, please please remind people that the housing crisis was not a crisis of unfair loans, but a crisis of stupid valuations on homes that people could not afford.
    Following the government’s “solution” to “affordable” home ownership, the usual $40,000 down on a 200,000 home magically became 10% on a $400,000 home or even 5% on an $800,000 home. And they’re all underwater because of why?
    Doh. This [upsets me] me even more than my $15 a month bank fee.

  20. Kevin Wenck October 17, 2015 / 8:34 pm

    2,300 pages of largely incomprehensible gibberish that has been very expensive and time consuming to implement could have been more effectively handled with simple overall guidelines such as:

    – 20 percent minimum down payment percentage for mortgages (which would also help increase the pathetically low national savings rate)
    – effective leverage limits on hedge fund and financial institution trading activities in line with existing Federal Reserve Regulation T financing limits (limited to no more than 1:1 leverage ratios)
    – higher overall equity/capital ratios for financial institutions in place of more complicated to calculate and implement “risk adjusted” capital ratios (which should have been reviewed anyway by the Federal Reserve examiners)

    Vega is also correct about the distorting affects on real world economic activity from the currently low interest rates as there definitely is a bubble in the current financial markets as a result of such low rates.

  21. RunLizRun October 17, 2015 / 8:34 pm

    Last week, Senator Elizabeth Warren introduced a Bill that would
    reinstate the Glass-Steagall Act protections for taxpayers. Its title is “The 21st Century Glass-Steagall Act of 2015”.

    • Tom Topar October 18, 2015 / 3:56 am

      “21st Century … Act of 2015”? Is there another century to which a 2015 law might be attributed? Liz’s mastery of higher mathematics is clearly commensurate with her understanding of economics and finance.

      The zeal with which she attacks Wall Street suggests she is compensating for some extreme guilt over past behavior–mortgage flipping, perhaps?

      Now that she’s got hers, she wants to stop others from like behavior. How about she simply donates all her “ill-gotten” gains to charity, and leave the rest of us alone.

      You need to learn some basic economics. Until then, shut the fuck up, you ignorant cunt!

  22. Bart Comer October 17, 2015 / 8:36 pm

    The Dodd-Frank legislation truly is an abysmal failure. It resembles other programs and efforts in this current Obama administration that is all about government control, picking winners and losers, and increasing regulations. The regulations under Dodd-Frank, much like Obamacare, has crushed competition, thus leading to the consumer getting less of a deal (or at least paying more for it).

    The Obama administration, more than any previous administration, is run by pure academics that only know one thing — how to increase governmental control and hard-wire the outcome. The real world of experience does not exist in Washington, so the result is a strangled economy that cannot grow due to the regulatory burden. In the Dodd-Frank bill, big banks are happy because their fortunes have increased as smaller banks and lending institutions cave under the enormity of new rules and regulations. The big guys absorbed them at some cost, but overall the scales tipped in their favor.

  23. Jellin' with Yellen October 17, 2015 / 8:38 pm

    May I also note that minority home ownership has fallen dramatically since DFA and there are no prospects for it to rise since economic growth at 2% is essentially like being in an economic holding pattern. The DFA and the President have literally crushed the economic standing (and hope) of the minority community and liberals now have to resort to naked race baiting to keep the people angry. I am from the Jack Kemp school of empowerment, working in minority dominant areas and I put my money and my talent where my mouth is! If only a few more liberals would get out of their limos and ivory towers, they might actually be able to empower people but then again, that means they have to actually help them versus exploiting them for personal gain.

  24. Kris Myers October 17, 2015 / 8:39 pm

    It is too late to appeal to the American people with logic, reason, and facts. Enough people have been completely indoctrinated by the Party. So many are brainwashed to reject or ignore any information that runs contrary to the Party platform that democratic means of liberation are impossible. The Party says that the crisis was a result of greedy bankers, and that’s the end of it.
    “In a way, the world−view of the Party imposed itself most successfully on people incapable of understanding it. They could be made to accept the most flagrant violations of reality, because they never fully grasped the enormity of what was demanded of them, and were not sufficiently interested in public events to notice what was happening. By lack of understanding they remained sane. They simply swallowed everything, and what they swallowed did them no harm, because it left no residue behind, just as a grain of corn will pass undigested through the body of a bird.”
    -George Orwell, 1984

  25. DEMON DOUG 69 October 17, 2015 / 8:39 pm

    I commend the WordPress for finally having the courage to bring this fact out. Well at least for allowing Mr. Vega to do so. I have seen it in small bank after small bank throughout the USA.
    Dodd-Frank and ObamaCare as Pres. Obama continues to bragg are “fundamentally changing the country”. Middle America wake up!

  26. David Zoltan October 17, 2015 / 8:40 pm

    After 5 years it is a failure?

    Heck, many of us saw it as a failure before the signature ink dried. It’s too complex and worse it is a solution for a problem that has not occurred.

    “Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.” – Groucho Marx

  27. Fred Carriage October 17, 2015 / 8:40 pm

    Democrats view business and successful persons as targets for extortion. Their insatiable lust for power is only exceeded by their execrable abuse in exercising it.
    They extort hundreds of billions of dollars from bank shareholders, in only one of the hundreds of schemes democrats use to steal cash, to dole out to bureaucrats, cronies, race hustlers, and legions of other parasites upon ordinary bard-working, law-abiding, and tax-paying Americans.

  28. Gerald Gunter October 17, 2015 / 8:44 pm

    “Big banks are bigger, small banks are fewer, and the financial system is less stable.”
    Democrats will not admit it, but that end was the whole point of Dodd-Frank.

  29. Ray McKennie October 17, 2015 / 8:48 pm

    Obama has failed on every level and every new law and regulation. Next time we need to hire a president that knows something about business and has, at the very least, run a successful paper route or shoeshine stand.

  30. Terry The Trout October 17, 2015 / 8:49 pm

    Yikes. This law is going to be even worse than ObamaCare. I didn’t think such was possible. I’m fucking tired of this gay-ass bullshit.

    • Bart Comer October 17, 2015 / 8:50 pm

      I hate Dodd-Frank just as much as you do, but you need to calm down! Take a sleeping pill!

  31. Thomas Frietas October 17, 2015 / 8:49 pm

    It’s interesting that the common understanding is Wall Street was some how responsible for the mortgage derivatives crisis and the economy melt-down. Lost in the telling is Congress’ “affordable housing mandates”. The signing picture heading this article shows the Congressmen (and women) largely responsible. Where were the republicans?

  32. Rick Schaja October 17, 2015 / 8:50 pm

    Dodd-Frank is just one more failure in Obama’s squandered Presidency. The leftist’s agenda is easily discerned and yet difficult to contain it’s metastatic nature.

    Their rhetoric is seductive, but when morning comes, you find yourself in bed with a toad.

  33. Charles Mantlie October 17, 2015 / 8:51 pm

    The Socialist Encephalitis Virus(SEV) is rampant in D.C.
    Symptoms are; 1. Dissolving of the Spinal Cord, 2. The inability to balance a checkbook, and 3. The willingness to turn over all decision making to the federal government. The only known cure is an election. However another is looking promising. Exile to Cuba to prevent further infection of the population.

  34. Gina Digget October 17, 2015 / 8:51 pm

    Dodd-Frank demonstrates the Vicious-Circle Tactics of the Left.
    They impose regulations because “the free market is bad,” which lead to distortions, which lead to bad economic consequences….which lead to more regulations because “the free market is bad,” which lead to more distortions, which lead to more bad economic consequences……which lead to more regulations because “the free market is bad.”

  35. Anthony Alfero October 17, 2015 / 8:54 pm

    Is the real intent of Dodd-Frank to preserve the banking system, the next time gov’t tries to destroy it? Have they put a leash on the mad dogs at HUD yet? Have they stopped allowing promissory notes on future welfare payments to qualify as a down payment on a home purchase?

  36. RunLizRun October 17, 2015 / 8:55 pm

    This is fascinating. Zach’s list of complaints about Dodd-Frank are virtually identical to Wall Street’s complaints about Dodd-Frank. What a coincidence! Well, probably not. I wonder if Zach wrote this piece or if it was written for him by well-paid Wall Street lobbyist? Isn’t it remarkable that Republican politicians are still in the pocket of Wall Street.

    • Nathan Hale October 17, 2015 / 8:56 pm

      Shut your mouth. Leave. Never come back. You don’t listen to logic!

    • Tom Topar October 18, 2015 / 1:26 am

      Just because Wall Street doesn’t like the regulations is not evidence against the fact the regulations and the FED are the CAUSE of financial crises.
      This cause-and-effect chain is undeniable to anyone who knows anything about economics–even to Keynesians.
      Which means this: the visceral hatred for capitalism does not derive from false allegations about its failures, but because it leads to individual wealth. And wealth, in the collectivism mind, is evil. As Ayn Rand said, it represents “hatred of the good for being the good.”

  37. RogerEgg October 17, 2015 / 8:57 pm

    Everything the Democrats touch, they destroy. By design and intent.

  38. Jas Gish October 17, 2015 / 8:59 pm

    Great picture of the 14 stooges.

  39. Jeff Rankin October 17, 2015 / 8:59 pm

    This is RIGHT ON the facts.
    While social science teachers and history professors blame the free market for the Great Depression, economists know it was the FED and government regulation that caused it. Yet the myth won’t die.
    Dodd-Frank is so big, so intrusive, so broad in scope, so repressive and restrictive, so distorting, that we WILL be in for another big financial crisis. It is the cause and effect consequence of this degree of federal government control over the economy.
    Let’s call this for what it is: Fascist Socialism.

  40. Ronald Mahan October 17, 2015 / 9:00 pm

    The true unemployment rate (hidden in the labor participation rate) and economic malaise is what we get with such government intervention as Dodd-Frank…

  41. Fred Green October 17, 2015 / 9:03 pm

    The federal government is the most dangerous threat to this nation.

  42. Chelsea Goh October 17, 2015 / 9:08 pm

    Given Chris Dodd’s and Barney Frank’s legislative record before Dodd-Frank, this a case of letting the arsonists put out the fire.

  43. John Martini October 17, 2015 / 9:09 pm

    And you still think that “crony capitalism” a la the Third Reich style is still a myth? The dumbing down of America is alive and well.

  44. Jian Neo October 17, 2015 / 9:12 pm

    Another (Democrat) government policy / agency / law that has failed? Gee, nobody saw that coming!
    In this case, the onerous legislation that was meant to eliminate “too big to fail” has instead allowed big banks to thrive and regional and community banks to wheeze through. The new label for Dodd- Frank should be “too small to prosper”!
    A word to the wise… Don’t amend it! Don’t try to make it better! Repeal it! Repeal all of it!

  45. Dee75 October 17, 2015 / 9:16 pm

    Establishment Republicans will align with big government Democrats (I know, there aren’t any other kind of Democrats!) and the veto pen of Obama to prevent anything from changing!
    Maybe the best that Conservatives can hope for is a President like Hillary Clinton, who, in 30 years of public life, has never led, managed, or accomplished anything! Not one thing! Maybe that’s the best we can hope for?

  46. Thomas Millhouse October 17, 2015 / 10:05 pm

    We do learn and many of us knew that this bill would be a disaster, but the country at the time elected a far left wing Congress along with a far-left idealogue as President, so this is how we ended up with a false narrative of the financial crisis, with Republicans doing very little to challenge that narrative then or now. So the common man still earnestly believes that the crisis was caused by greedy bankers and that the government had nothing to do with it, but had to ride to the rescue, hence all these ridiculous laws are justified. This is what happens when the opposition party is incoherent in presenting its core beliefs and lets a bunch of Socialists explain a financial crisis.

  47. Craig Shields October 17, 2015 / 10:27 pm

    Why is everyone here ignoring the point that good intentions are more important than good outcomes???

    • mycutebaby October 18, 2015 / 1:07 am

      +5 on the sarcasm scale.

  48. Frankford October 18, 2015 / 3:07 am

    And you still think that “crony capitalism” a la the Third Reich style is still a myth? The dumbing down of America is alive and well.

  49. Will Ellis October 18, 2015 / 3:08 am

    Great piece.
    Glad somebody’s shouting about this bad outcome. The costs run deeper than just the banks getting killed off quietly.

  50. David Ho October 18, 2015 / 3:15 am

    I agree that Dodd-Frank is a failure at this point. The solution to the 2008 financial crisis is not more regulations and it is certainly not handing back the reins to banks and financial institutions.

    We need to return to free markets that is more informed and transparent. In 2008, investors were unware of looming risks because they ill-informed. Corporate profits were inflated. Potential losses were covered up by credit swaps. We needed, back then and now, better financial data so that individual investors can oversee the markets, rather than the banks and financial institutions.

  51. Jeromy Leow October 18, 2015 / 3:20 am

    Failure?? That sounds like a Democratic success story to me.

  52. Rick Williams October 18, 2015 / 3:20 am

    Our small community lost its branch bank 6 years ago when the parent company was bought by a larger bank. As a representative of town government, I have since met with 10 regional banks to try to get a satellite bank branch in town. Zero luck! All have cited the need to close and/or consolidate services and branches. AND all have indicated that Dodd-Frank is major driver in those decisions.
    Lastly, the real loser here is not the retail customer, but small and mid-sized businesses that need a physical bank for loans and services.

  53. Shum Jinrong Warren October 18, 2015 / 3:22 am

    That picture above is a stark reminder of where your country is now. In a country of over 300 million people the fact that they might represent Americans’ best is scary. When Maxine, Joe, and Nancy are on your team that is bad on an epic scale.

    Since this is the Democratic Party you can assume the opportunities for graft and corruption are baked in.

  54. Alex Cook October 18, 2015 / 3:23 am

    Mr. Dodd’s number one campaign contributor over his career was Citigroup, according to This shouldn’t be a surprise.

  55. Chua Shiwen Wendy October 18, 2015 / 3:42 am

    If only because they were demoRATs Chris Clodd and Barney’s Frank were failures.

  56. Kenneth Lin October 18, 2015 / 3:50 am

    Hey, if the Feds can nationalize the car companies, why not the banks? After all, it is for our own good.
    No politician or federal bureaucrat would ever abuse this power, right?
    Well, none except the IRS
    Oh, and the EPA
    And let’s not forget the CFPB, or those quasi-government-agencies-now-in-receivership-forever Fannie & Freddie.
    Hmm, on second thought, never mind.

  57. Leon Yip October 18, 2015 / 3:51 am

    Regulation ties the hands of managers and creates destabilizing regidities because of its many unforeseen unintended consequences. The more regulation there is, the more rigidities and unintended consequences and the more instability. That is just a fact of complex systems and it is hard to imagine a more complex one than the banking system.
    So the crisis was indeed the result of excessive regulation. The best solution would have been to “pulverize” banking, meaning breaking up any and all too-big-to-fails–for the record, I tend libertarian but over the years I’ve searched long and deep for a different way and I believe this is an unfortunate but necessary role for government–and reduce regulation.

  58. Murkoff October 18, 2015 / 3:53 am

    And now the same indept politicians are signing agreements with the world’s worst behaved countries leading us into chaos.

    • Ted Chan October 18, 2015 / 4:25 am

      The Liberal’s most effective solution to bad government is…
      More bad government.

  59. Choy Chee Keong Joesph October 18, 2015 / 9:55 am

    Typical Western socialist answer to EVERYTHING.

    Invest ever more unchecked, uncontrolled power into the Government.

    When are we going to learn that problems are NOT solved by the Government, they are caused by it.

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