re: Did anyone notice that Dodd Frank is about to be repealed?

quote:

---

Did anyone notice that Dodd Frank is about to be repealed?

---

What could go wrong

quote:

---

The crash was caused by policies which required/encouraged lenders to loan money to people for social justice reasons in an amout which exceeded what they could afford.

---

Any banker that thinks this/says this, is a fricking moron. The CRA does not require banks to make bad loans. It requires banks to invest in communities in which they take deposits. There are plenty of good people in bad neighborhoods that have great credit. They might not be able to afford MUCH, but they can buy themselves a modest home with financing.

Ignoring the politics of the Act's inception, regulators enforce the law as written. If a bank has not been able to lend to low-to-moderate income individuals, there are almost always very good reasons. Namely, a lack of affordable housing. But bad credit is also a valid excuse not to lend.

Lending more than people could afford was a failure all around. No responsible banker would do such a thing. DTI is a simple calculation. Unethical assholes ignored their fiduciary duty in search of greed. But ultimately, the customer was the dumbfrick stupid enough to think, "I can totally afford these 3 houses."

quote:

---

I don't know much about it. Wasn't it designed to prevent another huge financial meltdown? Is repealing it good then?

---

It's all a matter of perspective. Lightening the load on compliance costs will free up more capital for lending. So borrowers should see more readily available access to financing.

One of the things that has transpired since the crisis is regulatory urging of risk governance frameworks that mirror the COSO framework. 1st line of defense, 2nd, and 3rd. 1st line and 3rd have been more or less constants for larger banks forever. But 2nd line oversight has completely transformed. The ways that banks oversee their risks these days? Pretty incredible. The technology, the people (brilliant), etc.

Then you have offshoot economic impacts to financial or technology service providers that help banks meet some of these risk management directives. If the banks relaxed their oversight on the risk side, some of those companies will go under/struggle.

When it's all said and done, the US taxpayer and financial markets are MUCH less likely to bear the burden of another banking collapse in 2017 compared to 2006. Anyone that argues otherwise is looking for political points. It's all about capital and liquidity. And across the board, banks have much more of both now. From a risk-perspective, Basel III and the Volcker Rule have de-risked their balance sheets.

At the same time, I can't disagree. Dodd-Frank has likely limited their willingness to lend, as they clamor for more capital and liquidity. As those levels deteriorate, their balance sheets become more risky but consumers are better served. Just can't please everyone.

A bipartisan bill that was supported by most Americans.

It seems like a change that will make the bipartisan divide worse.

I don't know much about the bill, but the support it had was not one sided.

Please God let this be true.