Bank Regulations

In a classic case of overkill, the Dodd-Frank Bill that was passed in 2010 was championed by Senator Christopher Dodd and Congressman Barnie Frank. Those of us who are in the industry recognize that those two men along with many others in both parties were the primary beneficiaries of the FMNA (Fannie Mae) lobbying efforts which showered politicians such as Mr. Frank and Mr. Dodd with $100,000 checks each year for over a period of eight or ten years while what became the sub-prime bubble was created by Fannie Mae. When the inevitable crisis occurred, they passed legislation which made banking almost impossible.

There have been very few new banks created since the passage of the Dodd-Frank Bill. That is because of the burdens that have been placed on the banking industry. While we are not suggesting that changes and improvements to the banking regulatory structure were unnecessary, we do think that overkill was accomplished in the Dodd-Frank Bill.

Loosening up some of those regulations and allowing banks to actually lend money in an environment where interest rates are above zero and capitalism is back in vogue will be a very positive force for the growth of the American and world economies.