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home : letters : letters May 24, 2016

12/18/2012 9:46:00 AM
Dodd-Frank: Obama administration is out of control

To the Editor: 

As people heed the recommendation of the “wicked-witch-of-the-West” Pelosi to find out what is in that 2,700 page monstrosity, ObamaCare, the details get more horrifying by the day. 

The resulting conflagration in the courts over ObamaCare’s constitutionality, states resistance to health care exchange establishment, and questions regarding its devastating effects on Medicare, Medicaid, and our entire medical system have totally hidden the stealthy, inexorable implementation of Obama’s other communist takeover of the nation’s financial industry in the Dodd-Frank Act. 

ObamaCare is carefully designed to conclude in the destruction of the private health insurance industry and takeover by the single-payer government option. On the surface Dodd-Frank appears to leave financial institutions as private entities, but in reality the small number of firms that manage to survive will be overburdened and blanketed by federal regulations and controlled by a new agency of the government called the Financial Stability Oversight Council (FSOC). This council is composed of all the federal financial regulators, including the Treasury Department, SEC, FDIC, and of course that creature from Jekyll Island, the Federal Reserve. The Treasury secretary, (who reports directly to Obama) is the council chairman.

The key responsibility of the FSOC will be to designate a classifying label to all financial firms: Whether or not the firm is a “systemically important financial institution” (SIFI). This applies to all firms including insurers, security firms, finance companies, hedge funds, pension funds, banks, and even possibly mutual funds and private equity firms. For banks with assets over $50 billion the designation is automatic; however, all other institution’s designations are totally at the discretion of the FSOC. 

A SIFI is a firm that is “too-big-to-fail” and will always be protected from failure by taxpayers bailout. In competitive financial markets SIFI’s will have a significant advantage in acquiring investments since all monies are backed up by the government. The tendency here would be that this sector will be dominated by a very small number of “favored” firms. 

The downside for SIFIs is that they will be turned over to the Fed and subject to extreme regulation and supervision. The Fed will have absolute control of a firm’s liquidity, capital, and all activities. Having this level of control will allow the Treasury and the Fed to dictate to SIFI’s that they publicly and financially support the policies of the Obama administration. Simple but devastating punitive measures can easily be administered to non-compliant SIFIs. 

Finally Dodd-Frank gives carte-blanche approval for the Treasury secretary to seize any financial firm deemed in danger of failure which might result in financial instability. 

A further destructive measure hidden in the Dodd-Frank bill is the establishment of the brand-new Consumer Finance Protection Bureau, (CFPB) designed by ultra-liberal Elizabeth Warren, which should really be called the Bureau for Bringing Down the Entire Economy. 

This is a new initiative to force banks to lend to low-credit-rated blacks and Hispanics and is threatening – and already imposing – huge punitive fines if they don’t. Additionally, the CFPB will facilitate this process through a planned takeover of the three credit rating agencies and force them to change their standards to accommodate blacks and Hispanics so that nobody will have any idea who is a bad credit risk and who is not. 

The details of this process are defined in CFPB’s newly-adopted 20-page “Policy Statement on Discrimination in Lending.” The policy states: “Applying different lending standards or offering different levels of assistance to applicants who are members of a protected [i.e., minority] class is permissible in some circumstances. Providing different treatment to applicants to address past discrimination would be permissible if done in response to a court order.” 

The CFPB will hammer away at the credit rating agencies to upgrade the scores of blacks and Hispanics. So Obama has instituted a perfect formula for the creation of a second big mortgage meltdown. 

With the Obama administration in power, the perception among minorities is that everything in the economy can be had for free and that President Obama and his administration are going to provide it for them. We are experiencing a rising tide of dependency and the growing sense that nobody has to be responsible for anything anymore and we can all live off “the rich.” Soon, there isn’t going to be much left to pick over in the American economy.

The 800-page Dodd-Frank bill (also not read, nor understood by Congress) is a communist-like atrocity foisted on the country by an out-of-control Obama administration.

Charles Boyd 
Manitowish Waters

Reader Comments

Posted: Saturday, December 29, 2012
Article comment by: Jeff Wallace

I like reading letters to the editor -- even ones with which I disagree. I feel that I should try to understand the concerns and view points of others. But, this letter by Mr. Boyd is over the top. I didn't learn anything when the author started out with derogatory terms for people (“wicked-witch-of-the-West” Pelosi). I didn't learn anything when he grossly misuses labels like communism. I didn't learn anything from exaggerated statements about minorities getting everything for free.

When I got past the negativity I found two issues that he was trying to address. First, he feels that "Obamacare" is goint to lead to the "destruction of the private health insurance industry and takeover by the single-payer government option". What?? Obamacare is not government run health insurance like Medicare. Instead, it allows people who do not have insurance to select from a variety of plans offerred by private insurance companies.

Second, the author feels that the Dodd-Frank legislation is unwarranted regulation designed to bring down our economy. Really?? This legislation was a direct response to the risky financial gambling of large investment banks. That risky gambling did bring down our economy. Dodd-Frank is designed to prevent that from happening again.

I guess I didn't learn much from the author's letter except that some people have very extreme views. I encourage the author to express his views, but to please try to frame his arguements in a more positive manner.

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