Congress should repeal Dodd-Frank
Liberals in Congress are livid that conservatives would dare to meddle with the Dodd-Frank financial regulation law. It is needed to safeguard Americans against predatory bankers, say some Democrats.
Had Dodd-Frank been in effect a decade ago, the 2008 financial crisis might never have occurred, the law’s defenders insist. Americans who lost their homes to foreclosure would have been protected, the liberals maintain.
Indeed, some controls on financial institutions are needed. But let us not forget one of the chief villains in the so-called “subprime lending” scandal was the federal government.
For years before the meltdown, the government pressured mortgage lenders to hand out money to borrowers who never should have qualified to receive the amounts they did.
More than a few bank executives knew that if they did not meet quotas in lending to risky candidates for mortages, they might run afoul of federal regulators. So, sometimes knowing Uncle Sam would bail them out if borrowers could not meet their obligations, the banks wrote checks.
Government policy played an enormous part in triggering the “Great Recession.” And, surprise, there are indications some financial institutions may be under pressure again to take risks with mortgages.
Yes, some financial institution regulations are needed – but Dodd-Frank went too far and should be repealed. In the process of doing that, perhaps Congress should act to ensure the government’s own house is in order.