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Dodd-Frank's Problems -- and Potential Solutions

Fuzzy2 Wrote: Jan 07, 2013 7:12 PM
All 2,300 page bills require decades of lawsuits to sort out the boundaries of the regulation. Lawyers love this stuff. The financial institutions, however, have no choice but to wait to see the outcome of hundreds of lawsuits to discover what the regulation really means. 2,300 pages that no one even knows how to comply with until the court cases are settled. So what do all financial institutions do? They take the most conservative possible lending policy. Even if it seems idiotic, the bank will require some foolish documentation that has nothing to do with improving lending quality. But it is a good replacement for waterboarding.
RHSimard Wrote: Jan 07, 2013 8:44 PM
And it's no accident. The longer and more convoluted, the more room for regulatory "discretion" (read: political pressure). Since these regulators work for departments that answer to the president, it's not too hard to see whose political, er, discretion, will be trickling down into the mess.

Then look at how some of the provisions are drafted. They are loose, vague and thus open to interpretations that are hard to challenge in court. Yet more space for regulatory bias.
Over the next year, we will probably see much controversy over the implementation of Obamacare. Health insurance is something that almost every adult has some acquaintance with, and there seem to be glitches aplenty in the legislation, much delay in issuing regulations and some possible changes resulting from litigation.

We're likely to see or hear less about the operations of the Dodd-Frank financial regulation legislation, passed four months after Obamacare. Most of us don't work at banks or financial institutions, which will have to grapple with its myriad provisions and the regulations to be issued thereunder, and we tend to toss...