US
President Barack Obama shakes hands with House Speaker Nancey Pelosi after signing the Dodd-Frank Wall Street Reform and Consumer Protection Act at the Ronald Reagan Building in Washington, D.C., July 21, 2010. (Official White House Photo by Pete Souza)

This official White House photograph is being made available only for publication by news organizations and/or for personal use printing by the subject(s) of the photograph. The photograph may not be manipulated in any way and may not be used in commercial or political materials, advertisements, emails, products, promotions that in any way suggests approval or endorsement of the President, the First Family, or the White House. President Barack Obama shakes hands with House Speaker Nancey Pelosi after signing the Dodd-Frank Wall Street Reform and Consumer Protection Act at the Ronald Reagan Building in Washington, D.C., July 21, 2010. (Official White House Photo by Pete Souza) This official White House photograph is being made available only for publication by news organizations and/or for personal use printing by the subject(s) of the photograph. The photograph may not be manipulated in any way and may not be used in commercial or political materials, advertisements, emails, products, promotions that in any way suggests approval or endorsement of the President, the First Family, or the White House.  

Report: Dodd–Frank rules squeeze consumers, protect big banks

According to a report released Thursday by American University’s Investigative Reporting Workshop, the recent Dodd–Frank financial reform bill will help big banks strengthen — and even entrench — their financial positions at the expense of consumers.

When President Obama signed the bill into law in July of 2010, he indicated that the reverse was true.

In a typically florid signing speech, Obama talked at length about how the reforms would create a fairer banking industry, claiming Dodd–Frank would look “out for people — not big banks, not lenders, not investment houses.”

The Investigative Reporting Workshop report found that while small to medium size banks hold most of Americans’ liquid assets, a series of mergers among bigger banks has the potential to shift the balance of power, gradually giving consumers fewer options.

“While the Senate was debating a measure last year that would have forced some of the biggest banks to shed some of their parts, the megabanks were actually growing.

Since 2007, the share of assets held by banks with more than $50 billion in assets grew from about 65 percent of total assets to nearly 69 percent,” the report concluded.

The report, titled “Banking’s future: The big will get bigger,” quotes OptiRate CEO Serge Milman, an asset-acquisition specialist who believes this trend is likely to continue.

“In the next 12 to 18 months we are going to see a huge number of acquisitions,” Milman told the Workshop. “Hundreds of banks will fail, either taken over by FDIC, or taken over and acquired (by other banks) for pennies on the dollar.”

In his coverage of the report, Washington Examiner correspondent Timothy Carney notes a 2010 interview conducted by The Daily Beast’s Michael Hirsh.

Then, Hirsh quoted a former Treasury official who argued that Dodd–Frank would ultimately encourage bank consolidations by creating more barriers to entry for new, smaller banks.

The Treasury official warned that Dodd–Frank would create this risk “by imposing new capital charges that will create barriers to entry for new firms, especially in swaps and other derivatives, while at the same time permitting giant bank holding companies to continue controlling most of what they were before.”

Virtually all the viable Republican presidential hopefuls are united in their opposition to Dodd–Frank, with former Utah Gov. Jon Huntsman and former Massachusetts Gov. Mitt Romney making a repeal a measurable part of their jobs plans. Texas Gov. Rick Perry has yet to clearly state his position on repealing the measure.

  • Rumpus6

    To quote Gomer: “Suuurprise, surprise, surprise.” Like scorpions, they just can’t help themselves.

  • http://twitter.com/suneet67 suneet gautam

    sick dude 

  • Anonymous

    Oh really? You do not say… How many outlets will report this? Very few…

  • Anonymous

    Oh really? You do not say… How many outlets will report this? Very few…

  • Adhender

    Imagine that…

  • Adhender

    Imagine that…