The end of the Dodd-Frank Act?

[vanillabean]

Debt collectors who refuse to identify themselves. Banks that aggressively upsell unwanted credit cards. Mortgage brokers who disregard borrowers' ability to repay loans. Financial advisers who pitch high-fee annuities.

These are some of the financial industry players who have been in the crosshairs of the Consumer Financial Protection Bureau and the law that enacted the bureau's enforcement powers, the Dodd-Frank Wall Street Reform and Consumer Protection Act.

President Trump, who has high-profile Wall Street bankers working as his top aides, has been clear about his intent to roll back Dodd-Frank's regulatory reach and the CFPB's independence.

[Dalmus]

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@vanillabean wrote:

Debt collectors who refuse to identify themselves. Banks that aggressively upsell unwanted credit cards. Mortgage brokers who disregard borrowers' ability to repay loans. Financial advisers who pitch high-fee annuities.

These are some of the financial industry players who have been in the crosshairs of the Consumer Financial Protection Bureau and the law that enacted the bureau's enforcement powers, the Dodd-Frank Wall Street Reform and Consumer Protection Act.

President Trump, who has high-profile Wall Street bankers working as his top aides, has been clear about his intent to roll back Dodd-Frank's regulatory reach and the CFPB's independence.

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 Like most "sweeping legislation," I think that Dodd-Frank could certainly use some adjustments to address some of the unintended consequences of the Act.

 For example...  The Act has led to increased violence and poverty in places like the Congo because of the "conflict minerals" rule.  That is a bad thing.  It also required fiduciaries to act in the best interests of their clients.  That is a good thing (if properly defined).

[cem13]

My issue with Dodd-Frank is the heavy regulation in compliance and reporting.  Some companies, especially banks, have to hire thousands of employees just to "check a box".    So teh eliminate of waste is aways a good thing.

There are a few items that are good for the economy but overall Dodd-Frank is outdated and needs to go.

[Anonymous]

Well I agree that some provisions of the act could use a rework overall I think it's good.

As far as outdated, seriously it's not even 7 years old! It hasn't even been around long enough to see some of the effects.

Maybe the term outdated was just hyperbole.

[Anonymous]

Yesterday this got closer to reality. According to ABC News:

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A House panel on Thursday approved Republican-written legislation that would gut much of the Dodd-Frank law enacted by Democrats and signed by Obama in the wake of the financial crisis and the Great Recession. The party-line vote in the Republican-led House Financial Services Committee was 34-26.

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[CreditDunce]

Here is an article with a little bit more context about the changes being pushed:

http://www.nbcnews.com/business/consumer/why-republicans-want-declaw-nation-s-consumer-financial-wat...

[Blackswizz750]

While the Act isn't perfect, non are, maybe it should be examined and amemded . I am sure there are folks on this board that has used to report CRA's to CFPB for mishandling of their reports. I have learned since the great recession to read my terms(it sucks but at least I know what I am getting into). Just my 2 cents.

[pipeguy]

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@CreditDunce wrote:

Here is an article with a little bit more context about the changes being pushed:

http://www.nbcnews.com/business/consumer/why-republicans-want-declaw-nation-s-consumer-financial-wat...

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@CreditDunce wrote:

Here is an article with a little bit more context about the changes being pushed:

http://www.nbcnews.com/business/consumer/why-republicans-want-declaw-nation-s-consumer-financial-wat...

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That's a pretty one sided article IMO. Here is one from the other point of view:https://www.forbes.com/sites/alexverkhivker/2017/05/10/the-financial-choice-act-will-roll-back-wall-...

The Financial CHOICE Act is a rather extensive bill hundreds of pages long. Here is an executive summary:

CRS Summary: Bill Summary & Status

SUMMARY AS OF:
4/27/2017--Introduced.

Financial CHOICE Act of 2017

This bill amends the Dodd-Frank Wall Street Reform and Consumer Protection Act, among other Acts, to:

• repeal Volcker Rule restrictions on certain speculative investments by banks;
• with respect to winding down failing banks, eliminate the Federal Deposit Insurance Corporation's orderly liquidation authority and establish new provisions regarding financial institution bankruptcy; and
• repeal Durbin Amendment limitations on fees that may be charged to retailers for debit card processing.

Certain banks may exempt themselves from specified regulatory standards if they maintain a certain ratio of capital to total assets and meet other specified requirements.

The bill removes the Financial Stability Oversight Council's authority to designate non-bank financial institutions and financial market utilities as "systemically important" (also known as "too big to fail"). Under current law, entities so designated are subject to additional regulatory restrictions. Designations made previously are retroactively repealed. 

The bill also amends the Consumer Financial Protection Act of 2010 to:

• convert the Consumer Financial Protection Bureau into a consumer law enforcement agency;
• subject the agency to the congressional appropriations process, expanded judicial review, and additional congressional oversight; 
• eliminate supervisory authority over financial institutions; and
• limit the agency's authority to take action against entities for abusive practices. 

In addition, the bill:

• modifies provisions related to the Securities and Exchange Commission's managerial structure and enforcement authority;
• eliminates the Office of Financial Research within the Department of the Treasury; and
• revises provisions related to capital formation, insurance regulation, civil penalties for securities laws violations, and community financial institutions.

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Without getting into the politics of the CFPB - this agency operates without Congressional oversight and does NOT deposit billions of dollars in fines (not taking restitution to consumers) to the treasury. Not only are there due process issues with the CFPB, but funding is through the Fed and there are a lot of people that would like to audit the Fed too.

In general, I am personally a CFPB fan/supporter, but the lack of oversight or accountability is a real issue.

A second issue is the "Durbin Amendment" which capped swipe fees for debit cards - banks screamed, but are enjoying pretty strong earning. Credit Unions and small banks say they are hurt too, but small merchants are all for the capping or limiting of these fees. H.R. 10 (Financial Choice Act) repeals the limits on debit card swipe fees - there is opposition to this section, hopefully, that section will be removed (pretty strong pressure from both sides on this).