Trump - Dodd-Frank Reform

[DeacMan]

Finally, someone actually gets it. Small and medium sized businesses have been crippled in their ability to invest because of this law. And so many of the regulations associated with this law were just woefully slow in being proposed and rolled out. It finally looks like things are about to change. I have never seen a more worthless pace of implementing regulation than existed under this law. Many of the regs were years late in being even proposed And worse yet they kept on moving the dates over and over and over again - which business hates because they simply don't know how to plan. I'll be curious to see how the changes here are structured. But it is welcome news if it is done well.

 

[PhDeac]

So what do you like about the actual reform?

 

[WakeandBake]

Finally, someone actually gets it. Small and medium sized businesses have been crippled in their ability to invest because of this law. And so many of the regulations associated with this law were just woefully slow in being proposed and rolled out. It finally looks like things are about to change. I have never seen a more worthless pace of implementing regulation than existed under this law. Many of the regs were years late in being even proposed And worse yet they kept on moving the dates over and over and over again - which business hates because they simply don't know how to plan. I'll be curious to see how the changes here are structured. But it is welcome news if it is done well.

How are small businesses crippled in their ability to invest?

 

[2&2 Slider To Leyritz]

How are small businesses crippled in their ability to invest?

Dodd-Frank imposed significant regulatory requirements on banks, which impacted small community banks the most because they don't have the massive compliance departments necessary to keep up with the reporting requirements. Small community banks target mostly small businesses that can't get decent service from BofA or Wells Fargo because of their small size. DF was significantly reducing small banks as a financing option for small businesses, who can't get attention and/or reasonable deals from the larger banks. So the net result is that DF was significantly inhibiting small business' ability to get funding.

 

[EatLeadCommie]

Dodd-Frank imposed significant regulatory requirements on banks, which impacted small community banks the most because they don't have the massive compliance departments necessary to keep up with the reporting requirements. Small community banks target mostly small businesses that can't get decent service from BofA or Wells Fargo because of their small size. DF was significantly reducing small banks as a financing option for small businesses, who can't get attention and/or reasonable deals from the larger banks. So the net result is that DF was significantly inhibiting small business' ability to get funding.

So are you saying it consolidated more power into the hands of the bigger banks?

 

[Deacsfan27]

Hopefully laws that act as safeguards to prevent another financial meltdown like the one last decade are either kept in place, or new ones are put in.

Also, I really hope that there are laws kept on the books that require advisors to act in the best interest of their clients so people don't continue to get taken advantage of by banks and "advisors".

 

[Deacsfan27]

So are you saying it consolidated more power into the hands of the bigger banks?

Keep in mind that his current advisors on the matter are CEO's at: JP Morgan Chase, IBM, Tesla, and GM. Do you think they have the small companies and small banks interests in mind, or the big ones?

 

[buckets]

Don't go full brasky

All he is saying is that it got harder for smaller banks to make loans to small businesses and big ass banks don't make the time for small businesses

Unless you think BofA is consolidating the market on local pizza shop loans

 

[RJKarl]

Clinton's biggest mistake was killing Glass-Steagle,

 

[tiltdeac]

Anybody have a good link for me to read about Final Regulations/Wall Street reform in general? I know nothing about this.

 

[2&2 Slider To Leyritz]

Don't go full brasky

All he is saying is that it got harder for smaller banks to make loans to small businesses and big ass banks don't make the time for small businesses

Unless you think BofA is consolidating the market on local pizza shop loans

Right. I don't think it necessarily gave the larger banks any more power than they already had, it just eliminated options for small banks/businesses so the market need goes unmet because of the government interference.

 

[EatLeadCommie]

Don't go full brasky

All he is saying is that it got harder for smaller banks to make loans to small businesses and big ass banks don't make the time for small businesses

Unless you think BofA is consolidating the market on local pizza shop loans

Right. I don't think it necessarily gave the larger banks any more power than they already had, it just eliminated options for small banks/businesses so the market need goes unmet because of the government interference.

ok this makes sense.

 

[2&2 Slider To Leyritz]

Also, and this has gone largely unpublicized, but the lack of viable funding options opened up a huge amount of sheisters/scammers to prey on small businesses. I've had several acquaintances get duped into private lender schemes where they are to put up $5k or $10k as origination fees for alleged group non-institutional bank loans, allegedly backed by large bank or international letters of credit, only to have the brokers claim that the loan "fell through" and run off with their money. The scammers will line up 10 or 20 businesses in a pool, collect the consolidated fees, and go dark on all of them at once. The FBI has been chasing them and trying to freeze accounts and sue them for recovery, but that money is long gone by that point.

 

[Shooshmoo]

I look forward to Trump fixing what ailed small businesses but making sure the big banks are held in check. I think we all feel confident that's what will happen given how great he's done so far!

 

[RJKarl]

I look forward to Trump fixing what ailed small businesses but making sure the big banks are held in check. I think we all feel confident that's what will happen given how great he's done so far!

Well, Trump was great at going BK to stiff banks, lenders and contractors. He was great at making it more difficult for banks to give loans to small businesses after he stole the banks' money.

 

[WakeandBake]

I don't think the facts bear out that it has "crippled" small businesses.

Regulations are the easy-to-swallow whipping boy that the big banks just love to trot out, meanwhile they are outperforming even their own projections. And small community banks are surviving despite low interest rates.


The Wall Street Journal:

It’s a favorite lament of community banks: The 2010 Dodd-Frank law is squeezing small financial firms and crimping access to credit for Main Street, all in the name of protecting the country from another financial crisis.

A look at the data shows the reality is more complicated, and small banks are proving surprisingly resilient by some measures. Meanwhile, the bigger challenge than weathering compliance costs, say banking consultants and analysts, is generating profits during a period of unusually low interest rates.

That could soon change. A rate increase from the Federal Reserve, expected by the end of the year, could help small banks start to build margins again, boost capital—a critical component for small firms with limited access to capital markets—and support additional lending to small businesses and households.

“Dodd-Frank—that term—became the poster child for every regulatory ill that’s been foisted onto community banks,” said Camden Fine, president of the Independent Community Bankers of America, which represents thousands of small banks. “There are regulatory burdens that community banks face today that are real, but had nothing to do with Dodd-Frank,” he said, adding that in any case, low rates are a bigger issue for small banks.

“Community banks are much more reliant on the income driven from the net interest spread, whereas the larger banks have diversified their operating revenue stream,” said Anita Newcomb, president of A.G. Newcomb, which consults with small and regional banks.

Banks have tried to counteract those effects by taking on more higher-yielding assets that mature over a longer period of time, which could pose problems when short-term rates start rising.

Ms. Newcomb said many small banks are taking steps to mitigate those risks, but they’re ready for the Fed to get on with it. “I think everyone would agree a rate rise would be kind of nice,” she said.

https://www.wsj.com/articles/dodd-franks-effect-on-small-banks-is-muted-1443993212

 

[DeacMan]

So are you saying it consolidated more power into the hands of the bigger banks?

Call it an unintended consequence where a market become very underserved. Much like SOX compliance. The government takes a one size fits all type approach and the little guy is imposed with outsized costs. Whether the big guy leaps into that market is another question.

 

[RJKarl]

Bake don't bother the RWers. They have their mantras and believe in #alternatefacts.

 

[06deacon]

Bake don't bother the RWers. They have their mantras and believe in #alternatefacts.

Give it a rest RJ, you don't know dick about this, any more than your straw man "RWers"

 

[2&2 Slider To Leyritz]

I don't think the facts bear out that it has "crippled" small businesses.

Regulations are the easy-to-swallow whipping boy that the big banks just love to trot out, meanwhile they are outperforming even their own projections. And small community banks are surviving despite low interest rates.


The Wall Street Journal:







https://www.wsj.com/articles/dodd-franks-effect-on-small-banks-is-muted-1443993212

Just because those community banks are doing well for other reasons doesn't mean that the regulation didn't significantly reduce the amount of small business loans available. Those are two different concepts. The ABC store across the street from me is doing well, but that doesn't mean I can get Pappy there.