6 ms·

Given that Trump gutted Dodd-Frank, what point are you making exactly?

chrisco255 4y ago
Presumably, a bank could follow any behavior dictated by the original Dodd-Frank Act voluntarily, if it was a good piece of legislation in the first place.
- MikeTheGreat 4y ago
  The point of legislation like this isn't to support good actors who were going to make good choices regardless, it's to limit what bad actors will do when left to their own devices. If everyone did the right thing on their own then we wouldn't need laws to prevent wage theft, or false advertising, or people dumping toxic chemicals in rivers people might drink out of, or murder.
  - chrismcb 4y ago
    I think the point is... you works think that the person who helped write the dodd Frank act, would probably follow it, even if it wasn't in law.
    - creato 4y ago
      That sounds nice but it’s childish, like suggesting people voluntarily pay more taxes than owed. Don’t hate the player, hate the game. It’s perfectly reasonable to follow the rules of the game while believing the rules can and should be be improved. Or in Barney Frank’s case, actually doing so.
      - chrisco255 4y ago
        How would the original Dodd-Frank legislation have stopped Frank's own bank from failing? Or is it the case that there are always inherent risks in banking and that no legislation is sufficient to prevent all failures? Perhaps even, sometimes legislation has unintended side effects that lead to adaptive behavior in the market which then causes a shift in risk patterns that then ultimately causes a different, altogether unforeseen disaster?
    - fwlr 4y ago
      He says in the article that he quickly realized the 50 billion threshold was too low and began advocating to raise it. Why would you expect him to follow the part of his legislation that he thinks is a mistake, after he succeeded at fixing that mistake?
  - Jtsummers 4y ago
    It's also to (at least theoretically, can't comment on Dodd-Frank specifically but other areas of compliance that I've dealt with) ensure that even good actors don't stray too far. "Normalization of deviance" is a real issue, even for well-intended individuals and organizations. Having some manner to hold people to account can reduce (though certainly not eliminate) those incidences as well, or provide a way to get back on track (including, potentially, paths for self-reporting and rectifying to discourage coverups).
- woodruffw 4y ago
  The point of legislation is to enact behavior because not everyone is a beneficent actor. If we could rely on beneficence alone, there would be no need for law. (It should be obvious that banks do not do strictly beneficent things.)
  - chrisco255 4y ago
    Sure, but in this case, the co-author of one of the 21st century's most consequential banking regulations was placed in a leadership role at a bank that ended up failing.
- cma 4y ago
  Only if Dodd-Frank addressed only individual bank owner risk and not systemic and depositor risk.
- GavinMcG 4y ago
  Depends. If competitors aren't playing by the same rulebook, you're at a competitive disadvantage, and that risk could outweigh the risks you'd prefer to avoid. Regulation is needed not just to prevent risky actions, but to evenly distribute the incentive to avoid risky actions.
  - chrisco255 4y ago
    That's not true of banks, because as history has shown, a temporary competitive advantage as a result of riskier behavior often ends with insolvency (indeed, often is the case with business in general, but especially banking). In the case of Frank and his leadership and influential role, it stands to reason he would foresee such risks and avoid them. As of yet, though, I haven't heard any concrete argument about a specific item of the original legislation (or its current leaner form) that would have prevented Signature or SVB failures.
  - ImHereToVote 4y ago
    This makes no sense. It was a bank not a hedge fund.
    - GavinMcG 4y ago
      Do you think banks don't need to compete? Aren't exposed to risk? They're not hedge funds, but they're still participants in various investment markets, and compete for customers on rates.
unmole 4y ago
You mean S.2155? The legislation that Barney Frank supported?
- radlad 4y ago
  True, he supported it overall but... > Problems with the bill, Frank said, include the amount at which a bank is considered risky and subject to harsher oversight. The new bill increases the threshold five times, from $50 billion to $250 billion. > “Fifty [billion dollars] was wrong,” Frank said. “It was too low. … But I think above 125 [billion dollars] was a mistake.” https://www.cnbc.com/2018/03/16/bill-to-rewrite-dodd-frank-bank-rules-is-mostly-reasonable-barney-frank.html https://www.cnbc.com/2018/03/16/bill-to-rewrite-dodd-frank-b...
  - sokoloff 4y ago
    What would you have done as president in that moment? Sign this bi-partisan bill or not sign it? (Strike through $250M and write in $125M and sign that is not an option.) I find it hilarious when the executive branch (of either team red or team blue) gets blamed for faults which plainly and obviously stem from the legislative branch.
    - deleted 4y ago
      [deleted]
GeekyBear 4y ago
> Given that Trump gutted Dodd-Frank, what point are you making exactly? Given that the legislation in question was bipartisan, what point are you making? >Senators had assembled a rare bipartisan coalition to pass the bill by winning support from 17 Democrats https://www.washingtonpost.com/business/economy/divided-house-passes-major-bank-deregulation-bill-sends-to-trump/2018/05/22/6f3bb562-5dd2-11e8-a4a4-c070ef53f315_story.html https://www.washingtonpost.com/business/economy/divided-hous...
- RhodesianHunter 4y ago
  When something passes with full republican support, and a small fraction of democrats it's disingenuous to call it bipartisan.
  - GeekyBear 4y ago
    When the Republicans don't have the votes to pass a given piece of legislation and a large fraction of the Democrats in the Senate take their side, you can't call it anything else.

Presumably, a bank could follow any behavior dictated by the original Dodd-Frank Act voluntarily, if it was a good piece of legislation in the first place.

MikeTheGreat 4y ago
The point of legislation like this isn't to support good actors who were going to make good choices regardless, it's to limit what bad actors will do when left to their own devices. If everyone did the right thing on their own then we wouldn't need laws to prevent wage theft, or false advertising, or people dumping toxic chemicals in rivers people might drink out of, or murder.
- chrismcb 4y ago
  I think the point is... you works think that the person who helped write the dodd Frank act, would probably follow it, even if it wasn't in law.
  - creato 4y ago
    That sounds nice but it’s childish, like suggesting people voluntarily pay more taxes than owed. Don’t hate the player, hate the game. It’s perfectly reasonable to follow the rules of the game while believing the rules can and should be be improved. Or in Barney Frank’s case, actually doing so.
    - chrisco255 4y ago
      How would the original Dodd-Frank legislation have stopped Frank's own bank from failing? Or is it the case that there are always inherent risks in banking and that no legislation is sufficient to prevent all failures? Perhaps even, sometimes legislation has unintended side effects that lead to adaptive behavior in the market which then causes a shift in risk patterns that then ultimately causes a different, altogether unforeseen disaster?
  - fwlr 4y ago
    He says in the article that he quickly realized the 50 billion threshold was too low and began advocating to raise it. Why would you expect him to follow the part of his legislation that he thinks is a mistake, after he succeeded at fixing that mistake?
- Jtsummers 4y ago
  It's also to (at least theoretically, can't comment on Dodd-Frank specifically but other areas of compliance that I've dealt with) ensure that even good actors don't stray too far. "Normalization of deviance" is a real issue, even for well-intended individuals and organizations. Having some manner to hold people to account can reduce (though certainly not eliminate) those incidences as well, or provide a way to get back on track (including, potentially, paths for self-reporting and rectifying to discourage coverups).
woodruffw 4y ago
The point of legislation is to enact behavior because not everyone is a beneficent actor. If we could rely on beneficence alone, there would be no need for law. (It should be obvious that banks do not do strictly beneficent things.)
- chrisco255 4y ago
  Sure, but in this case, the co-author of one of the 21st century's most consequential banking regulations was placed in a leadership role at a bank that ended up failing.
cma 4y ago
Only if Dodd-Frank addressed only individual bank owner risk and not systemic and depositor risk.
GavinMcG 4y ago
Depends. If competitors aren't playing by the same rulebook, you're at a competitive disadvantage, and that risk could outweigh the risks you'd prefer to avoid. Regulation is needed not just to prevent risky actions, but to evenly distribute the incentive to avoid risky actions.
- chrisco255 4y ago
  That's not true of banks, because as history has shown, a temporary competitive advantage as a result of riskier behavior often ends with insolvency (indeed, often is the case with business in general, but especially banking). In the case of Frank and his leadership and influential role, it stands to reason he would foresee such risks and avoid them. As of yet, though, I haven't heard any concrete argument about a specific item of the original legislation (or its current leaner form) that would have prevented Signature or SVB failures.
- ImHereToVote 4y ago
  This makes no sense. It was a bank not a hedge fund.
  - GavinMcG 4y ago
    Do you think banks don't need to compete? Aren't exposed to risk? They're not hedge funds, but they're still participants in various investment markets, and compete for customers on rates.

unmole 4y ago

You mean S.2155? The legislation that Barney Frank supported?

radlad 4y ago
True, he supported it overall but... > Problems with the bill, Frank said, include the amount at which a bank is considered risky and subject to harsher oversight. The new bill increases the threshold five times, from $50 billion to $250 billion. > “Fifty [billion dollars] was wrong,” Frank said. “It was too low. … But I think above 125 [billion dollars] was a mistake.” https://www.cnbc.com/2018/03/16/bill-to-rewrite-dodd-frank-bank-rules-is-mostly-reasonable-barney-frank.html https://www.cnbc.com/2018/03/16/bill-to-rewrite-dodd-frank-b...
- sokoloff 4y ago
  What would you have done as president in that moment? Sign this bi-partisan bill or not sign it? (Strike through $250M and write in $125M and sign that is not an option.) I find it hilarious when the executive branch (of either team red or team blue) gets blamed for faults which plainly and obviously stem from the legislative branch.
  - deleted 4y ago
    [deleted]

GeekyBear 4y ago

> Given that Trump gutted Dodd-Frank, what point are you making exactly? Given that the legislation in question was bipartisan, what point are you making? >Senators had assembled a rare bipartisan coalition to pass the bill by winning support from 17 Democrats https://www.washingtonpost.com/business/economy/divided-house-passes-major-bank-deregulation-bill-sends-to-trump/2018/05/22/6f3bb562-5dd2-11e8-a4a4-c070ef53f315_story.html https://www.washingtonpost.com/business/economy/divided-hous...

RhodesianHunter 4y ago
When something passes with full republican support, and a small fraction of democrats it's disingenuous to call it bipartisan.
- GeekyBear 4y ago
  When the Republicans don't have the votes to pass a given piece of legislation and a large fraction of the Democrats in the Senate take their side, you can't call it anything else.