Marco Rubio’s Claim About Dodd-Frank at the GOP Debate Is Now A Thing

iStock 000016651896Small 2 300x199 What to Do When Your Bank Branch Closes There were 4 things I, personally, took away from the GOP debates yesterday.

1. Carly Fiorina may end up with a fairly responsible position should a Republican take office in 2016.

2. The whittling down process is going to be fun to watch, but only slightly less fun than listening to liberals and Democrats whine about these debates and how painful/annoying/useless/ugly/stupid/hateful/horrible and blah blah blah they are and how they yet somehow, still, can’t look away. All the feels for you. Really.

3. No one really cares about Trump and Trump really cares about no one.

4. The policy discussions will slowly emerge and the first one out of the gate (for me anyway) is Dodd-Frank, thanks to Marco Rubio.

Rather hilariously, Blake Hounshell of Politico wondered this aloud just after Rubio called for the repeal and replace of Dodd-Frank:

Well, I don’t know about Hounshell, but I had certainly heard it before. Here’s a bit from a US News & World Report piece back in January 2013:

Threatens Small Businesses. Dodd-Frank’s complex web of regulations favors large financial firms that can afford the lawyers to analyze them. New requirements will be disproportionately costly for small banks and small credit rating agencies. Dodd-Frank’s complex derivatives rules will further concentrate an already concentrated industry.

So, it’s been on the radar. Not a loud or strong blip, with the outrage focused more on protecting the too-big-too-fail banks and how that hurt the small community banks. But definitely a dim flashing light. Back in April of this year, Entrepreneur Magazine put the pieces together nicely:

Small businesses often rely on community banks for capital. Unlike big public companies that can issue new stock or sell bonds and commercial paper when they need money, small businesses are much more reliant on banks to provide them with the financing they need.  Among banks, community ones tend to be their most common financiers. Many big banks avoid extending credit to small companies because small business loans are time intensive, hard to automate, tough to securitize, and expensive to underwrite and service. …

The Dodd-Frank Act has made community banking more difficult.  The law increased total U.S. financial regulatory restrictions by nearly one-third and has required community banks to purchase new software, hire additional compliance personnel, and to spend more time responding to government oversight than before. More than four of every five small banks believes that compliance costs have increased since the passage of the Act, a recent survey shows.

So you see, there really is this butterfly effect when it comes to the economy. And it doesn’t really have to be “a thing” for it to happen. But perhaps it does for people to care enough to know about it.


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