AmericanThinker:
Regardless of what shape the economy is in, banks have been mistrusted by people for many years. In fact, 28 million people in the U.S. still stuff money underneath their mattress.
While banks do everything they can to get these people to open bank accounts, it’s not always feasible. Some live paycheck to paycheck and need immediate access to their money for everyday expenses.
There are also people who bring in a significant amount of income and still choose a cash-only lifestyle, thanks to the financial crisis that occurred from 2007-2010. It was this crisis that prompted the creation of the Dodd-Frank Act.
Why the Dodd-Frank Act was Created
Congress believed the financial crisis was caused by insufficient regulation of the private financial sector. So the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law on July 21, 2010 by Barack Obama and heralded some of the most significant changes in financial regulation since the Great Depression.
This act was intended to stabilize the economy, and prevent further collapse of major financial institutions like that of Lehmann Brothers — a firm that survived the railroad bankruptcies of the 1800s, the Great Depression in the 1930s, and both world wars, only to fall into bankruptcy by getting involved in the subprime mortgage market just prior to the collapse of the U.S. housing market.
But there are people who say this act is not providing the stabilization it claims. Like the House Financial Services Committee Chairman Jeb Hensarling, who says the act has done anything but stabilize the economy or prevent financial collapse and may have even led us into financial collapse.
And the president of the NAFCU, Dan Berger, says that since this act has been in place, his industry lost over 1,250 federally insured credit unions, adversely affecting consumers.
How this Act Affects Consumers and Lenders
For consumers, the Dodd-Frank Act protects borrowers from abusive lending and mortgage practices often seen from banks. And, for lenders, it places heavy restrictions for mitigating their potential risks, forcing them to cut back on administering loans.
Gives me an idea:
Benjamin Franklin Futons
Leftist article. “Banks are unwilling to make loans under $100,000 so the businesses can’t create jobs.” This is leftist Keynesian 101 socialist double speak. But the banks won’t loan to us so out businesses have to fail. Yeah whatever, capitalism doesn’t work.
And most people are financial victims and keep their money in mattresses because they don’t have enough government programs to help them manage their money. again, Yeah, whatever.
Small Business Administration; Another horribly expensive, low ROI gummit agency that needs to be done away with.
I don’t do any or little business with banks. I have belonged to a Credit Union for most of the past 40 years. I don’t really trust large banks and if I did it would be a small local bank.
I always did my banking w/ the small local banks … they treated me better, period! now all of them have been swallowed up by the Big Banks … but my local Big Bank still has the same management people & is still staffed by locals.
one thing Rand Paul was right about is the Federal Reserve … we have not had honest banking since 1913
(please read ‘The Creature From Jekyll Island’ … enlightening)
excuse me …. RON Paul
“Congress believed the financial crisis was caused by insufficient regulation of the private financial sector.”
Flat out lie. Congress knows they caused the financial crisis by forcing lenders to provide mortgages to unqualified borrowers; because Raycism. This Act was to camouflage their asses.
If you need a bank loan today, you have to reveal EVERYTHING about your business and personal finances. And you must give them monthly financial reports thereafter.
Criminals run the Economy.
I know this topic is as boring as listening to paint dry but there is a real world impact of male prostitute using Frank and Kennedy sandwich cohort Dodd’s abortion of a financial overhaul bill.
I know of a company that is attempting to build a $50MM state of the art facility. They’ve been in business for 60+ years, are worth hundreds of millions of dollars, have hired engineers to design and have construction cost estimates supporting the build. They know what it costs and don’t want to spend more than is needed.
They cannot get adequate financing from bank majors because of Dodd-Frank. They approached a major bank to finance the project but the appraisal process is such that there is a high wall of separation between the banks and the appraisers and unquestioned deference to this third party. The result cannot be disputed despite serious questions as to the assumptions used in an appraisal.
Long story short, a sure moneymaking project that would result in hiring hundreds of people to construct and hundreds of others to staff is in limbo because of this stupid law. An appraisal came in at half the construction contact cost. After downpayments, the financing offered wouldn’t be a quarter of the construction cost.
This isn’t poor, black Joe with a low credit score being taken advantage of by unscrupulous lenders. It is government mandated paralysis. But you can still get that $200k college loan for that non-asset backed humanities major that will pay $40k a year or a $40k car loan on a rapidly depreciating asset. Because Fairness and a constitutional Right To Live Caviar Dreams On A Fish Stick Budget.