The
Dodd-Frank Act of 2008 is on its way to be repealed. The comprehensive banking
regulations were designed to protect consumers, curtail corruption, and
eliminate risky investments. On June 8th, 2017, however, the House
of Representatives passed a bill that would abolish these regulations. The bill
now only needs to pass through the Senate and the President before the Dodd-Frank
Act is officially repealed.
This
is deeply troubling. The regulations were a response to the 2008 financial
crisis, when risky investments like credit default swaps led to the collapse of
the housing market. You might have seen the movie, The Big Short. It’s a great film for understanding the economic
necessity of Dodd-Frank. Its ending was overly pessimistic though—it acted like
no laws were passed to prevent the same thing from happening all over again.
The movie failed to acknowledge Dodd-Frank, which went to great lengths protect our country from economic disaster, and our citizens from
financial ruin.
Now that protection is about to vanish.
If the
Dodd-Frank-Banking Rules are repealed, we are back to square one. We’ll head
back to the days when predatory lenders used shady mortgages to enrich
themselves at the expense of the poorest Americans. The days when Lehman
Brothers gambled recklessly with the American economy.
I
never thought I’d see those days again. I thought we had learned our lesson.
Alas, the Financial Choice Act, as its backers are calling it, follows a long
trend of right wing politics demolishing basic protections for the average
American citizen in the name of freedom. In reality this is
just another legislative move meant to appease big investors and the rich.
To
understand this phenomenon in greater detail, read The Distortion chapter in my newest book, Reclaim American
Democracy.
