GOP Likely to Escalate Attacks on Dodd-Frank Regulations

Friday, 23 Sep 2011 10:33 AM

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Republicans will are likely to up attacks on the Dodd-Frank legislation that increases regulation on the financial sector as campaign season heats up, the New York Times reports.

Dodd-Frank aims to curb abusive lending practices, stop high-risk bets on complex derivative securities and protect consumers from financial fraud, among other goals.

Many of the bill's provisions haven't gone into effect, which will give Republicans new material to point out how President Barack Obama's efforts to increase regulation will continue to hamper economic recovery.

"It created such uncertainty that the bankers, instead of making loans, pulled back," says Republican presidential hopeful Mitt Romney, speaking at a South Carolina rally over Labor Day weekend where he again called for the law’s repeal, the New York Times reports.

The bill does have its supporters, some of whom in turn admit the law may hamper job demand.

"Dodd-Frank is adding safety margins to the banking system," says Douglas J. Elliott, an economic studies fellow at the Brookings Institution.

"That may mean somewhat fewer jobs in normal years, in exchange for the benefit of avoiding something like what we just went through in the financial crisis, which was an immense job killer."  

One of the law's authors, Democratic Massachusetts Representative Barney Frank, says banking executives will revolt against his legislation.

"I am disappointed at this revolt against risk retention that was so clearly at the center of this," says Frank, according to the Boston Globe. "All the other problems we had … they all centered on the system for selling to other people loans that shouldn’t have been made in the first place."

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