This post was written by Connor Balough
Donald Trump is holding back no punches on taking office. One of the first orders of business is to repeal the bill most responsible aside from Obamacare for the sluggish economy and massive amount of millennials stuck without mortgages: The Dodd Frank Act.
The Dodd Frank act was passed by liberals as a means of preventing people from taking out mortgages they couldn’t afford.
SECTIONS 404 and 406 of the Dodd-Frank law of July 2010 add up to just a couple of pages. On October 31st last year two of the agencies overseeing America’s financial system turned those few pages into a form to be filled out by hedge funds and some other firms; that form ran to 192 pages. The cost of filling it out, according to an informal survey of hedge-fund managers, will be $100,000-150,000 for each firm the first time it does it. After having done it once, those costs might drop to $40,000 in every later year.
The law set strict criteria for lenders, and penalized banks for anything that could be construed as a loan given out to a risky borrower. The problem with this is that it uprooted a practice of financing that went back to the beginning of money: there is always some kind of risk involved to the lender.
To put it in perspective, The law that set up America’s banking system in 1864 ran to 29 pages; the Federal Reserve Act of 1913 went to 32 pages; the Banking Act that transformed American finance after the Wall Street Crash, commonly known as the Glass-Steagall act, spread out to 37 pages. Dodd-Frank is 848 pages long.
So what was seen next was that nobody could meet the strict requirements set forth by the dodd Frank act, and banks stopped giving out mortgages like they used to. Top this with Obamacare keeping companies from being able to afford giving most employees more than 30 hours a week anymore, and we saw a complete drop in the economy for new entries into it. Laws like Dodd Frank are the reason why so many stagnant millennials depressingly turned to Bernie sanders and socialism. Trump repealing these acts will give the US just what it needs to put America to work again.