Written by: Alek Hidell
On July 21, 2010, President Barack Obama signed his name to the Dodd-Frank Wall Street Reform and Consumer Protection Act. The act came about as a result of the Great Recession, which we all know was caused by the banksters on Wall Street. Dodd-Frank’s purpose was to “Create a Sound Economic Foundation to Grow Jobs, Protect Consumers, Rein in Wall Street and Big Bonuses, End Bailouts and Too Big to Fail, Prevent Another Financial Crisis.” The act addressed derivatives, the “Volcker Rule”, consumer protection, and implemented a slew of other regulatory measures. All in all, an attempted overhaul at a corrupt and unjust system.
Dodd-Frank has been under attack by conservatives since day one. The talking points started right away. Everything from “Dodd-Frank is a job killer” to “customers will flee to foreign banks” were yelled by the opposition. Last year, in one of the biggest challenges to Dodd-Frank, the House passed the Swaps Regulatory Improvement Act, otherwise known as HR 992. A swap is a basically a trade of securities where the interest rate on the security makes the swap beneficial for both parties. Dodd-Frank regulated swaps so as to make firms who participate in certain swaps and derivative trading, no longer eligible for financial assistance, ie. loans to purchase said swaps. HR 992 looked to overturn parts of DF, which would set the stage for another financial meltdown. The New York Times found that 70 out of 85 lines of HR 992 were taken verbatim from a version of the bill written by Citigroup lobbyists. The bill was also sponsored by Rep. Jim Hines (D-Ct), a former Goldman Sachs executive. Plainly, this is not a bill introduced by the people. This is the banking industry’s attempt to buy legislation. Over $22 million in lobbying money came from interest groups supporting this bill.
The most recent challenge to Dodd-Frank came on November 19, 2014. The Competitive Enterprise Institute filed suit in a Washington court challenging three regulatory aspects of Dodd-Frank, meant to provide additional congressional oversight. The CEI claims that the creation of the Consumer Financial Protection Bureau, the Financial Protection Bureau and the Orderly Liquidation Authority are acting as regulatory agencies over practices not subject to congressional oversight. They also suggest that oversight has been “severely restrictive” in allowing banks to conduct business. The CEI is not alone in their mission. The law suit is backed by a slew of banking organizations as well as the States of Oklahoma, Michigan, South Carolina, Alabama, Georgia, Kansas, Ohio, Montana, Nebraska, Texas, and West Virginia.
While the constitutionality of Dodd-Frank is examined by experts on both sides, one thing is clear. The banking system proved with the financial meltdown, that ongoing scrutiny and regulation of the industry must continue. If left unchecked, the greed of Wall Street combined with little or no regulation is a losing formula for the American people and the world.
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Sources:
Wall_Street_Reform_comprehensive_summary_Final.pdf
