Topic: Dodd-Frank Creates Obstacles, Restricts Growth

[jpatrickham]

Daily Policy Digest
 
Economic Issues
October 24, 2011

"Just over one year ago, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law.  Dodd-Frank, a response to the 2008 financial collapse, was intended to increase oversight of massive financial institutions, such as large banks and stock brokers, and to monitor consumer transactions, such as payday loans and mortgages.  It was meant to address the concern that financial institutions in the United States had grown "too big to fail" and would need to be "bailed out" by the government to prevent a banking sector collapse, says Karlyn Gorski, a research assistant with the National Center for Policy Analysis.

However, Dodd-Frank gives the federal government increased power to control not only large banks, but also small banks and businesses.

Ironically, financial-sector concentration has continued to increase.
Rep. Ed Royce (R-Calif.) notes that before the banking crisis, the top 10 banks in the United States held 55 percent of total banking sector assets; today, they hold 77 percent.
Though Dodd-Frank is still in the implementation phase, it is becoming clearer that this complex legislation imposes regulatory burdens that will stifle efforts to grow businesses, but will not result in beneficial financial reforms.  Indeed, most banks are expected to make up for lost revenue from regulations through increased fees for checking accounts or higher interest on loans.

A major concern is that small businesses will be unable to obtain financing as a result of Dodd-Frank.  When there are more restrictions on the loans banks can make, fewer loans are made.  In fact, loans to small businesses have tumbled to a five-year low.  Because the law governs everything from traditional small business loans to personal credit cards and home equity loans, access to capital for small businesses will be restricted."

Source: Karlyn Gorski, "Dodd-Frank Creates Obstacles, Restricts Growth," National Center for Policy Analysis, October 24, 2011.



For text:

http://www.ncpa.org/pub/ba755



For more on Economic Issues:

http://www.ncpa.org/sub/dpd/index.php?Article_Category=17

[Libertas]

"In fact, loans to small businesses have tumbled to a five-year low."

I know small business owners who have been denied renewal of their short-term revolving line loans by banks they've had relationships with for years and who enjoy stellar credit history.  Small business people, especially in seasonal/construction related industries cannot start their operations each year without access to loans.  It's a cash flow intensive affair whereby operations are funded with loans and once cash collections roll in all debts (bank, vendor) are relieved over the course of the year.  Small business is being squeezed by all this BS and so a major component to national GDP is not going to experience any growth and will likely experience continued contraction.

Obamanomics and its proponents need to be removed, period.

[Pandora]

Oppressives pass law mandating goal A, resulting instead in consequence B.  Surprise.

"Liberalism always generates the exact opposite effect of its stated intent".  Jim Quinn.

[Sectionhand]

Dodd and Frank ... The Tweedle Dee and Tweedle Dumm of the U.S. Congress .

[Libertas]

I'd like to drum the tweedles about the head until...whatever...

[jpatrickham]

Dodd and Frank ... The Tweedle Dee and Tweedle Dum of the U.S. Congress .

Or, Unindicted Conspirator's!

[Damn_Lucky]

Ok I think we all know it was Dodd-Frank that caused all this mess.

Anybody got some nice old trees?

[Predator Don]

Destroying wealth one frank at a time.

[charlesoakwood]

They must not teach shop in high school anymore.

Radio said that at any given time there 300 welders in the Gulf of Mexico. (on rigs and platforms)
They are importing welders from the Philippine's because there are no American welders to
fill the job.   If you are American, a welder, and looking for a job call the Gulf.

 

[Sectionhand]

They must not teach shop in high school anymore.

I remember when it was called " Manual Arts " ... That dates me !