Improve Dodd-Frank — don’t repeal it |

Improve Dodd-Frank — don’t repeal it

Nancy Eubanks
John Hart/ | The Union

Here we go again with Republicans calling for repeal of Dodd-Frank that was passed to prevent another meltdown of the financial industry.

Dodd-Frank gives regulators the tools to reduce the risk of “too-big-to-fail problems” in the banking industry (quote from Ben Bernanke).

Dodd-Frank has a consumer protection agency that protects consumers from predatory lenders. It regulates the rating agencies and the insurance agencies. It regulates “derivatives” and “credit default swaps.” It regulates banks, making them have more collateral for the loans they approve.

And the Republicans want to repeal all of this and go back to the unregulated Bush years?

Obama has “kept us safe” from another collapse of the financial industry. No financial collapse, like the one in 2008, has happened on Obama’s watch.

Just like their claim that the Affordable Care Act is a “disaster” (despite claims to the contrary); and just like their solution to the ACA “disaster” is to repeal the whole law (offering nothing in its place), the Republicans are claiming Dodd-Frank is a “disaster” (ignoring all the good things it does).

Locally, we have Rachel Helm, in an editorial published by The Union, claiming that the “good intentions” (of Dodd-Frank) are really “the road to hell.” And again her solution is to repeal the whole law and offer nothing to replace it.

We have Republican candidate Marco Rubio saying, “Forty percent of small and midsized banks … have been wiped out since Dodd-Frank passed” and therefore we should repeal Dodd-Frank.

In an October 2015 editorial, the Wall Street Journal disputed Rubio’s claim. And in August 2015, an investigative reporter, Glenn Kessler, of the Washington Post gave Rubio’s claim three “Pinocchio’s” for misrepresenting the facts.

Let me remind people of the Republican ideology that smaller government, fewer regulations and tax cuts for the rich will let the free market (capitalism) grow our economy and everything will turn up roses.

What actually happened with fewer regulations (repeal of Glass-Steagall Act that kept commercial banks and Wall Street separated, and the 2000 Commodity Futures Modernization Act that prevented the SEC from regulating “derivatives” and “credit default swaps”) was the collapse of the financial industry.

In other words, unregulated capitalism leads to unchecked greed and corruption. Countrywide and Fannie Mae and Freddie Mac gave loans to people who shouldn’t have gotten them.

The banks reorganized them into subprime loans and sold them to unsuspecting investors. Rating agencies, in collaboration with the banks, rated these “credit default swaps” as AAA, and insurance agencies like AIG insured these bad loans.

Everyone along the way got their commissions and lots of people made lots of money. Greed ruled.

Then, when this house of cards collapsed, millions of ordinary people lost their homes and their jobs, unemployment soared to over 15 percent, trillions of dollars in wealth was lost, and the world was on the verge of a second great depression — the (true) “road to hell.”

In stepped “big government”, TARP rescued the banks from bankruptcy. Under Obama, The American Recovery and Reinvestment Act created jobs by providing money for infrastructure projects; thus stopping the rise of the unemployed.

The Federal Reserve, through low interest rates and “quantitative easement”, pumped money into the economy.

Obama rescued General Motors from bankruptcy — thus saving an industry that supports about one in six jobs in America.

I think it’s important to remember that the federal government has a long-standing role in protecting the American people, through targeted regulations, from the excesses of industry (capitalism).

Some examples are the clean air act, the clean water act, food safety laws, car safety regulations, worker safety regulations, etc.

One last reminder: Obama has “kept us safe” from another collapse of the financial industry. No financial collapse, like the one in 2008, has happened on Obama’s watch. Bottom line? We should keep Dodd-Frank and improve on it as needed — not repeal it.

Nancy Eubanks, who lives in Rough and Ready and is a member of the Nevada County Democratic Central Committee, is a member of The Union Editorial Board. Her opinion is her own and does not reflect the viewpoint of The Union or its editorial board. Contact her at

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