Dodd-Frank costs US financial sector 24 million man-hours per year for compliance

posted at 12:46 pm on April 17, 2012 by Ed Morrissey

And that’s just the start.  The House Financial Services Committee will roll out a report today showing that less than half of the required rule-making for the Dodd-Frank bill passed two years ago has been completed, but just the first 46% already comprises more than 5300 pages of rules:

Texas Republican Rep. Randy Neugebauer, the chairman of the committee’s subcommittee on oversight and investigations, told The Daily Caller that means that instead of hiring people to handle small business loans, banks will be hiring staff to comply with the new government regulations, ultimately having a negative impact on job creation.

“For example, let’s just get it down to the community banker — the person that loans money to most of the small businesses in our country,” Neugebauer said in a phone interview. “We’ve had a few community bankers come in here and say, ‘you know, they’re hiring a lot more compliance officer than they are loan officers.’ That is increasing the cost of banking and, ultimately, they have to charge higher interest rates and higher fees.”

“The other thing that it impacts for our small businesses is because of some of the new rules and regulations, there’s a great deal of uncertainty about certain types of financial activity that some of these entities can engage in,” Neugebauer added. “I think that as these rules come out, what we’re trying to ascertain, and our committee has had a number of hearings on, is what the unintended consequences of some of these rules and regulations, but more importantly, just the sheer volume of them.”

The committee has rolled out a “burden tracker” to explain the costs of Dodd-Frank compliance, and will have a video out later today with more information.  Rep. Randy Neugebauer put the burden into perspective:

“This online resource will help the public better understand how the cumulative weight of these new rules – layered upon existing outdated, unnecessary and duplicative red tape – hurts small businesses and financial institutions.  They have to spend increasing amounts of time and money dealing with all this red tape instead of engaging in the activities that grow our economy and create jobs,” said Committee Chairman Spencer Bachus.

Oversight and Investigations Subcommittee Chairman Randy Neugebauer noted that it will take businesses more time to comply with Dodd-Frank rules than it took to build the Panama Canal.

“It will take over 24  million man hours to comply with Dodd-Frank rules per year.  It took only 20 million to build the Panama Canal,” said Rep. Neugebauer.  “Banks and credit unions, retirement funds and other financial institutions will be forced to spend a large portion of their budgets trying to comply with Dodd-Frank rules rather than lending to small businesses and American consumers and investing in our economy.  While the promised benefits of Dodd-Frank are still illusory, the costs are beginning to become crystal clear.”

The financial markets require regulatory oversight in order to prevent fraud and theft, but that regulatory burden needs to be just heavy enough to get the job done without itself becoming an insurmountable obstacle.  Furthermore, the investor class at which this is aimed has to have a stable regulatory environment in order to price risk for future investment.  We are almost two years after the passage of Dodd-Frank, and the regulation hasn’t even been halfway completed.  Under those circumstances, it’s no big surprise that investors are reluctant to put capital to work in the US economy, and that growth has been stunted as a result.

One might think that an administration with so much on the line in this economy would have put a higher premium on developing such regulations — and overall fiscal and economic policies, for that matter.  In my column for The Week, I write about how the Buffett Rule fight shows the intellectual bankruptcy of this White House, and how they are desperate to change the subject:

In this case, though, the failure of the Buffett Rule bill puts the Obama administration in a tough spot, especially after the stunt vote on Obama’s budget. The problem? Team Obama has nothing else to offer on the budget or the economy. In fact, President Obama has spoken of nearly nothing else but the Buffett Rule for the last eight months, since the launch in September of his “fairness” campaign. The White House has sold this proposal as a panacea for nearly all of the nation’s financial ills. The White House spins this surtax as a debt and deficit stabilizer “for the next decade” (September), as well as a strategy for economic growth (in his most recent Saturday address), and finally both, as David Axelrod argued on Fox News Sunday.

Wow! The Buffett Rule must provide an amazing amount of revenue — or so one would think listening to this hype. But it would actually raise just $31 billion to $47 billion … over ten years. Compare that to Obama’s own proposal for the FY2013 budget, which had a projected deficit of more than $900 billion, and ask how $47 billion “stabilizes” the annual deficit, let alone the national debt. As for economic growth, Obama’s 2009 Cash for Clunkers spent more than $3 billion in three weeks and didn’t do anything more than move demand from a future month forward. The American economy will generate more than $14 trillion in this year; even the higher-end number of $4.7 billion would amount to a tiny sliver of the economy, hardly enough to create a hiccup in growth — even if one believes that taking capital away from investors and putting it into the hands of government amounts to a growth strategy. …

The U.S. faces significant economic and fiscal problems, joblessness among them. We do need to stabilize our national debt, which has grown by more than $4.4 trillion in the three years since Obama signed the FY2009 omnibus budget bill two months after taking office ($11.066 trillion to $15.539 trillion at the end of last March), after the Democratic-controlled Congress refused to pass a budget for Bush to sign the previous September, as required. We need tax reform to simplify and broaden the tax base and get more revenue through growth, and we need rapid job creation to fuel that revenue increase.

Instead, though, the Obama administration has spent eight months and uncounted hours of presidential stump time demanding a tax tweak that would solve only 0.45 percent of the annual deficit crisis, provide no growth opportunity at all, and do nothing to create jobs. The Treasury Secretary can only point to three-year-old crisis management as a defense of the administration’s economic policies. No one in the White House has a plan to solve the larger problems, and as this weekend shows, they don’t even want to talk about the larger problems anymore. All they want to discuss is how unfair life is, reminisce about the good ol’ days of 2009, and point out to anyone listening that Mitt Romney is really, really rich.

Ironically, Dodd-Frank is still one of their few talking points on the economy.  Don’t expect that to last long.


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Do the dems ever do anything good?

celtic warrior on April 17, 2012 at 12:49 PM

Frank and man-hours ?
hehheheheeh….

burrata on April 17, 2012 at 12:50 PM

Dodd-Frank costs US financial sector 24 million man-hours per year for compliance

Hey, that’s 12,500 full-time jobs “saved” or “created” by Hugh Gubmint!

Steve Eggleston on April 17, 2012 at 12:50 PM

Central planning can be a bit cumbersome, but, it insures fairness.

a capella on April 17, 2012 at 12:51 PM

And yet the fraud and corruption continue un-abated.

BobMbx on April 17, 2012 at 12:51 PM

I have heard that Bank of America has already spent $2 billion on DFA compliance. It’s almost impossible to overstate how burdensome this law is.

Many of the biggest banks are dropping mortgages from their offerings, mostly due to the massive uncertainty in DFA about what constitues a “Qualified residential Mortgage,” but also bnecause there is so much litigation now around mortgage origination and servicing. If the housing market ever does pick back up, it will be hard for a lot of people to get loans.

rockmom on April 17, 2012 at 12:51 PM

After O-care, this along with Sarbanes-Oxley should be dumped.

Rixon on April 17, 2012 at 12:51 PM

Banking reform, the Bawney Fwank way.

Archivarix on April 17, 2012 at 12:51 PM

Dodd-Frank: another pile of sh!t worthy of a 1-page repeal bill next year.

gsherin on April 17, 2012 at 12:52 PM

Sorry, but why are Dodd and Frank not in jail yet?

lorien1973 on April 17, 2012 at 12:52 PM

Another one of those “we have to pass it to find out what’s in it” laws except they aren’t yet done putting the stuff in it.

Bitter Clinger on April 17, 2012 at 12:54 PM

Sorry, but why are Dodd and Frank not in jail yet?

lorien1973 on April 17, 2012 at 12:52 PM

Eric Holder’s busy getting to the bottom of Fast & Furious.
/////////////////////////////

Bitter Clinger on April 17, 2012 at 12:55 PM

Sorry, but why are Dodd and Frank not in jail yet?

lorien1973 on April 17, 2012 at 12:52 PM

This.

d1carter on April 17, 2012 at 12:55 PM

A fair price to pay for never having another recession ever again. bwahahahaha

rhombus on April 17, 2012 at 12:55 PM

Do the dems ever do anything good?

celtic warrior

Retire?

keving on April 17, 2012 at 12:57 PM

This is why the stupid government has no business minding business’s business.

The government can’t tell the difference between productive work and un-productive work. Inefficiency, thy name is no longer CHAOS. It has been changed to GOVERNMENT.

rwenger43 on April 17, 2012 at 12:57 PM

While there’s no doubt this bill costs businesses money, these studies are ridiculous. It’s the same thing when studies show some new tax form will mean Americans spend and extra million hours on their taxes.

As for the community bankers, give me a break. 70-80% of the loan process is automated now. They’re not hiring loan officers because there is no need for them anymore. There’s no need for paper pushers anymore when there is no paper to push. You guys sound as ridiculous as Obama blaming ATMs for the loss of teller jobs.

angryed on April 17, 2012 at 12:57 PM

I have heard that Bank of America has already spent $2 billion on DFA compliance. It’s almost impossible to overstate how burdensome this law is.

Many of the biggest banks are dropping mortgages from their offerings, mostly due to the massive uncertainty in DFA about what constitues a “Qualified residential Mortgage,” but also bnecause there is so much litigation now around mortgage origination and servicing. If the housing market ever does pick back up, it will be hard for a lot of people to get loans.

rockmom on April 17, 2012 at 12:51 PM

Which will lead to the need for the Federal government to become the loan servicer of choice for mortgages, just as in with college loans. Just part of the plan to undo the private sector.

Bitter Clinger on April 17, 2012 at 12:58 PM

Do the dems ever do anything good?

celtic warrior

The solution to government caused problems is always more government. Duh.

chimney sweep on April 17, 2012 at 12:58 PM

The whole point of Socialism is bureaucracy. That there is always someone, somewhere – to tell you what to do. To regulate you.

The ultimate goal is for the People to simply give up, out of futility. And, when the People have given up, the State has won.

The Socialist filth in Congress, and in the White House, want us to give up – that’s when they win.

OhEssYouCowboys on April 17, 2012 at 12:59 PM

OT, but apprapos:

This is Leon Panetta on his travel costs to the taxpayer:

“I regret that it does, you know, that it does add costs that the taxpayer has to pick up,” Panetta said during a Pentagon briefing Monday, speaking publicly for the first time about the flight costs. “A taxpayer would have to pick up those costs with any secretary of state or secretary of defense. But having said that, I am trying to look at what are … the alternatives here that I can look at that might possibly be able to save funds and, at the same time, be able to fulfill my responsibilities, not only to my job, but to my family.

How about moving to DC? You’re a big VIP, I’m sure you’ll be able to locate a fabulous realtor. So how many school-aged kids do you have to be concerned about…you know, pulling them out of school, losing neighbor friends, etc.?

You could have said “No, I want to fulfill my responsibilities to my family”.

BobMbx on April 17, 2012 at 12:59 PM

Sorry, but why are Dodd and Frank not in jail yet?

lorien1973 on April 17, 2012 at 12:52 PM

I’ve been asking that for years.

Yakko77 on April 17, 2012 at 1:00 PM

angryed on April 17, 2012 at 12:57 PM

Guess you haven’t bought a home in a while. The paperwork is Nightmare on Elm Street.

Bitter Clinger on April 17, 2012 at 1:01 PM

We are slaves to our government.

Axion on April 17, 2012 at 1:01 PM

Which will lead to the need for the Federal government to become the loan servicer of choice for mortgages, just as in with college loans. Just part of the plan to undo the private sector.

Bitter Clinger on April 17, 2012 at 12:58 PM

Why not? Fannie and Freddie already hold interest in most of the mortgages.

What could possibly go wrong?

Steve Eggleston on April 17, 2012 at 1:02 PM

Well the US financial sector is probably the most well equipped in the whole world to handle such a compliance expense, so why again is this an issue.

ernesto on April 17, 2012 at 1:03 PM

Money well spent on non-binding shareholder votes.

blammm on April 17, 2012 at 1:06 PM

Well the US financial sector is probably the most well equipped in the whole world to handle such a compliance expense, so why again is this an issue.

ernesto on April 17, 2012 at 1:03 PM

Yeah, it’s not like they pass those expenses on to their customers or anything.

Bitter Clinger on April 17, 2012 at 1:08 PM

You guys sound as ridiculous as Obama blaming ATMs for the loss of teller jobs.

angryed on April 17, 2012 at 12:57 PM

Trust me, you are completely out of your mind. It has consumed my daytime activities as well as about a half dozen other staff members who used to actually do productive things.

You need to get a clue on this one. The documenting and remediation that’s requiring thousands of hours at billions of cost is quite real.

You sounds like L4L with that drive by comment.

VietVet_Dave on April 17, 2012 at 1:10 PM

Guess you haven’t bought a home in a while. The paperwork is Nightmare on Elm Street.

Bitter Clinger on April 17, 2012 at 1:01 PM

I have bought several homes recently. And yes there’s lot of paperwork, most of which is boilerplate legalese. But that’s from a customer’s POV. I don’t know about you but I e-signed most of my paperwork and the forms I couldn’t e-sign, I scanned and emailed back. There was never any actual paper my loan officer had to touch.

angryed on April 17, 2012 at 1:13 PM

Well the US financial sector is probably the most well equipped in the whole world to handle such a compliance expense, so why again is this an issue.

ernesto on April 17, 2012 at 1:03 PM

Rocket Scientist, arn’t ya.

Jabberwock on April 17, 2012 at 1:14 PM

Don’t worry. David Brooks assured us Obama is taking the debt crises seriously.

gwelf on April 17, 2012 at 1:15 PM

drive by comment.

VietVet_Dave on April 17, 2012 at 1:10 PM

Typical brain dead talk radio zombie.
When Obama laments the ATM you mock him. But then turn around and lament the death of the paper pusher in the bank. Pathetic.

angryed on April 17, 2012 at 1:15 PM

Will this law be as effective as Sarbanes-Oxley was at preventing a MF Global?

shanimal on April 17, 2012 at 1:16 PM

Well the US financial sector is probably the most well equipped in the whole world to handle such a compliance expense, so why again is this an issue.
ernesto on April 17, 2012 at 1:03 PM

You didn’t actually read Ed’s post did you?

gwelf on April 17, 2012 at 1:16 PM

Sorry, but why are Dodd and Frank not in jail yet?

lorien1973 on April 17, 2012 at 12:52 PM

I’ve been asking that for years.

Yakko77 on April 17, 2012 at 1:00 PM

They both have the blackmail photos.

Del Dolemonte on April 17, 2012 at 1:17 PM

costs US financial sector 24 million man-hours per year for compliance

Right. And the innovative startups and smaller more nimble companies and the ones already operating on tight margins are least able to absorb this overhead cost. It just makes the bigger companies bigger as it forces the marginal operators out of business and acts as a barrier to new entry into the marketplace.

A young wiz kid with a great idea on a new way to offer/deliver services now has a new barrier of entry into the marketplace.

One way around that and create an economy of scale is to create a separate business that does compliance management and contracts their services out to smaller operators. It is sort of a “compliance department outsourcing” operation. That way each company does not need to have a separate compliance department. Smaller operators can hire the consulting operation and pay only a portion of the costs of having their own in-house compliance department.

If anyone wants to get into that business, there’s probably a gold mine but maybe someone already has.

Looks like a few companies are already in that market niche.

But generally, regulations such as this one simply cause the big to get bigger and the little fish to die.

crosspatch on April 17, 2012 at 1:18 PM

Doesn’t this count as stimulus?
Look at all those jobs created……//
24 million man-hours – isn’t that like 500 million people at work – Nanzi?//

dentarthurdent on April 17, 2012 at 1:18 PM

Sorry, but why are Dodd and Frank not in jail yet?
lorien1973 on April 17, 2012 at 12:52 PM

Homophobe!

gwelf on April 17, 2012 at 1:20 PM

Team Obama has nothing else to offer on the budget or the economy.

As lil’ Timmy Geithner said “We don’t have a plan, we just don’t like yours!”

GarandFan on April 17, 2012 at 1:20 PM

You need to get a clue on this one. The documenting and remediation that’s requiring thousands of hours at billions of cost is quite real.

You sounds like L4L with that drive by comment.

VietVet_Dave on April 17, 2012 at 1:10 PM

red has never apparently worked anywhere that had to deal with these issues. Companies are required to have someone complete the forms and then check the forms. Companies do not usually hire new people to perform this work, either. They heap the new crap onto people already doing the work of two. They call that enhanced productivity.

dogsoldier on April 17, 2012 at 1:20 PM

crosspatch on April 17, 2012 at 1:18 PM

Yes – and although some people might have jobs because of this, the reality is that we lose a huge amount in opportunity cost because the time and money is not spent on something that is actually productive and useful to society.

dentarthurdent on April 17, 2012 at 1:21 PM

Typical brain dead talk radio zombie.
When Obama laments the ATM you mock him. But then turn around and lament the death of the paper pusher in the bank. Pathetic.

angryed on April 17, 2012 at 1:15 PM

Lets look at the ATM situation… so on the surface it looks like its actually taking away a teller job in your world. Who builds the hardware? Who build the microcode? Who maintains the hardware? Who builds the applications the ATM ‘talks to’? Yes, Obama should be mocked for trying to sell that idiotic argument.

Now you need to go back and read my post. Quote me one place where I “lament the death of the paper pusher in the bank”. My post deals with the ridiculous regulations and governance this law has imposed on the financial industry which is what this post is about.

If you live near a JuCo, try taking a reading comprehension class before you foam at the mouth.

Ignorance on display is never pretty.

VietVet_Dave on April 17, 2012 at 1:35 PM

Isn’t Dodd-Frank full of all kinds of racial-diversity nonsense, too?

For crying out loud, it’s 2012. Are creditworthy minorities somehow unable to get credit? Didn’t we just learn a lesson about extending credit to those who are not creditworthy?

BuckeyeSam on April 17, 2012 at 1:43 PM

Yeah, it’s not like they pass those expenses on to their customers or anything.

Bitter Clinger on April 17, 2012 at 1:08 PM

It’s amazing to see the HotAir masses rush to judgement based on their general ignorance about why the American model of broker-dealer capitalism practically collapsed in 2008. How about the cost imposed on this country by the implosion of our financial system? Do you think that worked out well?

What we learned over the last decade (and is well documented in Too Big To Fail and other books) is that modernity hasn’t eliminated greed and that Glass-Steagall had imposed effective and even crucial limitations on the risks bankers are allowed to take in their attempts to maximize profits.

Or for any every man’s explanation:
http://blogmaverick.com/2010/05/09/what-business-is-wall-street-in/

bayam on April 17, 2012 at 1:45 PM

Didn’t we just learn a lesson about extending credit to those who are not creditworthy?

BuckeyeSam on April 17, 2012 at 1:43 PM

Yes, everyone is aware of the Glenn – Rush explanation of the financial crisis. It’s amazing that no leaders in the mortgage industry, not even conservatives, buy into that argument. Many banks including Wells Fargo, US Bank, and Chase, emerged from the crisis with relatively small losses on their books, despite the government supposedly ‘forcing’ all banks to accept any and every loan application, including a massive number of obviously fraudulent loan applications that were routinely accepted by some banks that no longer exist today.

bayam on April 17, 2012 at 1:49 PM

Foolish convervatives! Don’t you know when the cost of doing business goes up, companies just absorb it into their enormous, outrageous, evil profits! They don’t pass it along! And ALL banks and financial startups are big enough to handle this! It isn’t like it makes the big guys bigger or anything . . .

/sarc

Seriously liberals, profit is what keeps the stockholders happy, many of those stockholders old people living off the dividends and profits from their stocks. It would be irresponsible for the companies to NOT pass these costs onto their customers and keep their profit margins up.

There isn’t a corporate or business tax or fee that the consumer doesn’t end up paying. Period. It’s priced into the product, whether it’s a loan or a toy or a car or whatever.

The Clinton administration told the banks they had to let customers rip them off (make sub-prime mortgages to people who shouldn’t be buying a house) and that we’d cover their butts if it went south. Shocker upon shocker, it crashed. The big boys got bailed out, the little fish got eaten and the big boys got bigger.

The response: crush future little fish with regulation, make the only alternatives to little fish be the big boys so they can get bigger and keep giving hundreds of millions in campaign money to the same people who started it all.

The sheer intellectual dishonesty of liberals astounds me.

PastorJon on April 17, 2012 at 1:53 PM

Seriously liberals, profit is what keeps the stockholders happy, many of those stockholders old people living off the dividends and profits from their stocks. It would be irresponsible for the companies to NOT pass these costs onto their customers and keep their profit margins up.

Yes, Paul Volcker doesn’t understand that. Very insightful.

bayam on April 17, 2012 at 1:58 PM

What a coincidence, I was just reviewing some SOX (Sarbanes-Oxley) procedures in preparation for an audit on our SOX compliance.

I’m sure ernesto thinks I had nothing better to do at work today than review SOX (and soon DFA) procedures for a compliance audit. I’m wondering what other work I could have gotten done if I did not have to do this SOX garbage.

gravityman on April 17, 2012 at 1:58 PM

bayam on April 17, 2012 at 1:49 PM

I take it Holder is too busy suing states over election-integrity laws and immigration enforcement to be bothered with the matters you raised.

BuckeyeSam on April 17, 2012 at 1:59 PM

Yes – and although some people might have jobs because of this, the reality is that we lose a huge amount in opportunity cost because the time and money is not spent on something that is actually productive and useful to society.

dentarthurdent on April 17, 2012 at 1:21 PM

Absolutely. And Mitt Romney addressed this very issue in his speech at the NRA the other day. He said that you can’t measure the TRUE cost because the cost is really in the number of businesses that are NOT started, the dreams that are never realized, the jobs that are never created in the first place. That is *exactly* what he was talking about.

crosspatch on April 17, 2012 at 1:59 PM

gosh if only we got to spend another 700 billion dollars bailing out the banks again, then we would truly be free. Remember if giant banks and investment firms blow a hole in your country, it’s only right to pay them off and go back to business as usual. I’m sure they won’t do it again.

Zekecorlain on April 17, 2012 at 2:08 PM

Well the US financial sector is probably the most well equipped in the whole world to handle such a compliance expense, so why again is this an issue.

ernesto on April 17, 2012 at 1:03 PM

Compliance man-hours do not generate a marketable product or service for consumption by the company’s target market.

In case you don’t understand what that means, it means the man-hours do not contribute to the company’s productivity in generating revenue, since they can’t sell the end result of compliance man-hours to their consumer. It is therefore only able to be absorbed in overhead costs, which is distributed among the cost of the products they do sell in order to recover the costs. That means YOU and I get to pay for all those man hours.

I guess you just like higher priced goods and services.

gravityman on April 17, 2012 at 2:12 PM

Vote for O’care,then demean it….pass this mess, then retire…
Barney “Hit & Run” Frank….

hillsoftx on April 17, 2012 at 2:14 PM

Well the US financial sector is probably the most well equipped in the whole world to handle such a compliance expense, so why again is this an issue.

ernesto on April 17, 2012 at 1:03 PM

Liberalism, ALWAYS about good intentions, with ZERO analysis on consequences..

hillsoftx on April 17, 2012 at 2:18 PM

I’m a full time mortgage originator. Here is how Dodd Frank and a ton of other new Fed regulations impact the average loan.

1. Loan application is in now 65 pages long at least.

2. Due to the Home Valuation Code of Conduct rules, appraisals now cost 25% more than in 2007, and yet appraisers make 50% less than before. The differene all goes to the big banks.

3. It takes 4 days for a bank to QC the avg file compared to the 24 hours it took 5 years ago.

4. The Good Faith Estimate is 3 pages long and a ‘compliance redisclusre’ is at least 8 pages long compared to the 2 pages required in 2007.

5. Imagine the government telling you how much you can make….they cut my pay more than in half last April.

6. If I would like to cover some loan cost for a borrower, I am prevented by law from doing so.

7. If a very high quality borrower wishes to negotiate a lower rate with me than I would offer to a poor quality borrower , I am prevented by law from doing so, even if I wish to give up part of my compensation in the process.

8. We have as many compliance people as we have loan Underwriters now.

9. It take a month to sell a closed loan in the secondary market compared to the 3-5 days it took 5 years ago. The compliance regulations require hours of file review slowing down the sale of loans. This reduces the number of times we can ‘turn’ our credit line from 25-30/year to 12-15. That drains liquidity from the market.

DrW on April 17, 2012 at 2:26 PM

Sorry, but why are Dodd and Frank not in jail yet?

lorien1973 on April 17, 2012 at 12:52 PM

…there’s an argument about who get’s the top bunk…and who’s catching and pitching?

KOOLAID2 on April 17, 2012 at 2:33 PM

Sorry, but why are Dodd and Frank not in jail yet?

lorien1973 on April 17, 2012 at 12:52 PM

A nice Turkish prison, like the one in the movie Midnight Express, would be too good for them.

UltimateBob on April 17, 2012 at 2:45 PM

In looking at this photo I had to laugh since I know what these these three crooks have done to my kids future. Laughter’s better than crying. Just 3 of the treasonous lot that have trashed this countries future.

I think barney has his hand up dodd’s rump and obama is pointing out that dodd’s #1 in sphincter control.

acyl72 on April 17, 2012 at 2:51 PM

The elements of dodd-frank relating to the appraisal industry is already resulting in mortgage fraud and will result in a new real estate crisis within 5 years. Bank on it.

peacenprosperity on April 17, 2012 at 2:56 PM

That’s good, considering that the subprime market is humming again.

Hmmmm… “Humming”, in a Barney Frank thread? Bad form.

/sorry

Ward Cleaver on April 17, 2012 at 3:21 PM

I own a small retail business I started from scratch about 20 years ago, and Dodd-Frank doesn’t affect me directly. But in the Law-of-unintended-consequence area, I’ll offer this: the credit card fixes the government made a while back. The fix required the credit card companies to charge me less for each debit card transaction. That makes me a winner, doesn’t it? Nope. The minute the law went into effect, the credit card companies decided that all businesses had to take and pass a self-administered (yes, that’s self-administered!) security compliance survey annually. And they charge me about $60.00 for taking that test. (If I don’t take it, they charge me $20.00 a month that I am “out-of-compliance.) Another merchant I know has to pay about $120.00 a year.

Every minute taken up by Dodd-Frank compliance is a minute that cannot be used to improve the business. And the cost of Frank-Dodd compliance is added to the price of that company’s products.

catsandbooks on April 17, 2012 at 3:43 PM

Yes, Paul Volcker doesn’t understand that. Very insightful.

bayam on April 17, 2012 at 1:58 PM

As usual you make an irrelevant comment – and you have no clue what Volcker does or doesn’t understand or what his ultimate motives may be. He’s a lifelong Democrat, and he doesn’t really care how much profit a company is able to make. He has always favored more government control.
More government control has consequences that seriously affect companies and the economy – get a clue.

dentarthurdent on April 17, 2012 at 4:22 PM

It’s amazing to see the HotAir masses rush to judgement based on their general ignorance about why the American model of broker-dealer capitalism practically collapsed in 2008. How about the cost imposed on this country by the implosion of our financial system? Do you think that worked out well?

Hilarious, given that the screaming and crying bayam was among the first insisting that making decisions based on credit rating and ability to pay was “racist”.

After all, their Barack Obama was threatening to sue banks unless they made loans without conditions to black people.

What we learned over the last decade (and is well documented in Too Big To Fail and other books) is that modernity hasn’t eliminated greed and that Glass-Steagall had imposed effective and even crucial limitations on the risks bankers are allowed to take in their attempts to maximize profits.

bayam on April 17, 2012 at 1:45 PM

No, it had not.

The problem is that bigots like yourself, bayam, cannot stop purchasing votes.

You ordered Fannie Mae to buy loans that were high-risk. You and your Barack Obama threatened to sue banks unless they made high-risk loans. You and your Obama Party screamed, cried, and threw temper tantrums to get laws passed that ensured people did not have to pay their bills and could get credit regardless of their ability to pay.

And you damn near blew up the world’s financial system in the process.

You do not know anything about business. Nothing. If you did, you would realize that banks LOSE MONEY on bad loans. It’s not in their interest to make them, and they will not generally do so — unless, of course, they’re going to get sued by lazy “community organizers” like Barack or have their business punished by lazy “regulators” like Barack.

northdallasthirty on April 17, 2012 at 4:23 PM

Liberalism, ALWAYS about good intentions, with ZERO analysis on consequences..

hillsoftx on April 17, 2012 at 2:18 PM

Actually I would dispute the “good” intentions. Libs THINK they have good intentions, but for many people, espcially those who are productive and successful, their intentions are not good.

dentarthurdent on April 17, 2012 at 4:25 PM

I have bought several homes recently.

You’re out of touch, like Romney.

Swerve22 on April 17, 2012 at 4:26 PM

The problem is that bigots like yourself, bayam, cannot stop purchasing votes.

You ordered Fannie Mae to buy loans that were high-risk. You and your Barack Obama threatened to sue banks unless they made high-risk loans. You and your Obama Party screamed, cried, and threw temper tantrums to get laws passed that ensured people did not have to pay their bills and could get credit regardless of their ability to pay.

And you damn near blew up the world’s financial system in the process.

You do not know anything about business. Nothing. If you did, you would realize that banks LOSE MONEY on bad loans. It’s not in their interest to make them, and they will not generally do so — unless, of course, they’re going to get sued by lazy “community organizers” like Barack or have their business punished by lazy “regulators” like Barack.

northdallasthirty on April 17, 2012 at 4:23 PM

It’s great that you can recite Glenn Beck talking points… but clearly you didn’t read Too Big To Fail or any other credible accounting of the crisis. Your explanation is over-simplified and flat out wrong.

First, you have no idea how the mortgage lending game was played- you’re blissfully ignorant about why ‘bad loans’ were so aggressively pursued by many large banks. Of course banks either made or intended to make money on bad loans. Each loan produced income for the mortgage broker or a bonus for the bank underwriter. More importantly, banks actually believed that housing prices absolutely would not fall, fueling a land-asset grab under the misguided belief that even a ‘bad’ loan was highly desirable, since the bank would ultimately profit as the property value climbed (the very definition of a bubble). Lender can’t pay? Foreclosure looked like a good outcome to many bankers.

It’s really amusing that you believe ‘community organizers’ have so much control over the banking industry and Wall Street. You have some very naive beliefs about the the distribution of power in this country.

So tell us, why did Chase, Wells Fargo, and US Bank all exit the financial crisis with manageable losses if regulators were ‘forcing’ all banks to make bad loans? Why did some banks actually refuse to accept blatantly fraudulent loan applicants, while other banks sought out and quickly approved those same applicants?

Rampant, out of control fraud was occurring- and of course the FBI knew about it but held back from widespread investigation prosecution. In addition to fraudulent apps pushed by the all-powerful community organizers you cite, there was actually inside fraud as well. Where do you think 80% of fraud came from, anyway? Low income people?

http://articles.businessinsider.com/2010-05-18/news/30097544_1_straw-buyers-afg-financial-inflated-appraisals

http://www.ritholtz.com/blog/2011/12/fbi-estimates-80-of-mortgage-fraud-involved-industry-insiders/

bayam on April 17, 2012 at 5:22 PM

Commanding heights. Yay massive stupidity.

But hey, all that white guilt is gone now, the oceans retreated, and the lions sleep with the lambs! Rejoice!

If zero wins in november I hope his dreams are crushed by the lack of Dec.22, 2012.

Wolfmoon on April 18, 2012 at 12:45 AM

bayam on April 17, 2012 at 5:22 PM

Thanks for another demonstration of how completely clueless you are.
And to prove once again how stupid you are: Harold Hamm, Carl Icahn, Donald Bren, Richard DeVos, Phil Knight, Charles and David Koch, and Sheldon Adelson are all really smart people who disagree with you.
Sicne you seem to like name-dropping as some feeble attempt at proving a point, I thought I’d give it a try. Go look them up – all very successful conservative Republican billionnaires.

dentarthurdent on April 18, 2012 at 10:52 AM

Leftists always insist the latest pile of regulations will fix everything.

Until leftists get caught stealing and crashing financial systems (again).

At which point, they insist this next pile of regulations will fix everything.

There will never be enough regulations to satisfy leftists.

If I’m wrong, perhaps our idiot trolls will answer these simple questions. Do we currently have enough regulations? If not, how many are enough?

It’s ok, I know your answer already, but feel free to spin away (like you had another plan in mind).

runawayyyy on April 18, 2012 at 11:51 AM