Dodd-Frank was one of the worst laws ever enacted by the US. Not only will it kill small and medium size bankers, but it has incredibly broad reaching powers that no one fully understands the meaning of yet. If your stomach did a flip flop over The Patriot Act passed quickly after 9/11, then you should be in full tourista over Dodd Frank.
First of all, the law has a lot of blank space deliberately left in it so that regulators (bureaucrats) could fill it in. Most people think that Dodd-Frank only pertains to big banks. Goshdarnit, those damn big banks deserve all the scrutiny they get. Au contraire.
If for some reason any individual is determined to be a material financial risk to the economic system, they can be investigated. That’s any individual for any reason. The government can demand that you turn over every document, credit card statement, business statement, tax return so they can investigate your activity.
Imagine if someone in power had an agenda against you how they could abuse that power.
What’s even more telling is the dialogue CFTC chair Gary Gensler has been having over Dodd-Frank. Currently, they are concentrating on swaps and OTC transactions. They are gaining momentum because JP Morgan ( $JPM) lost a few billion on an OTC trade gone bad. However, the previous year they had a lot of OTC trades that went right.
This is the big problem with the bank bailout back in 2008. It’s one of the reasons I think we should have let all the bad players go under. Now that the government has “helped”, they feel as though they have the right to investigate all activity. You know, in the interest of the taxpayer. Today’s JP Morgan is your business tomorrow.
Suppose you have a scalable start up business that collects a lot of data on customers. But, you aren’t in banking or trading. You just happen to have a lot of financial information on people because of the business you are engaged in. What if some bureaucrat determines that you should give up all that private information to the government? They cite that you are a material risk to the world wide financial system and they go to work on you.
You are thinking, “No way will that happen”. Think again. Many a business in the US has been ruined by a government official with an agenda. Richard Nixon wasn’t the first, and Obama’s administration won’t be the last. |
