Skip to main content

ABA Chief: Dodd-Frank is Not Holy

Phil Hall
Jan 26, 2015

The head of one of the nation’s most influential financial services trade group used uncommonly bold language to challenge the supremacy of the Dodd-Frank Act, arguing that is should not be seen as a religious text that no one can question.

In an opinion column published in USA Today, Frank Keating, the president and CEO of the American Bankers Association (ABA), used an Old Testament analogy to challenge lawmakers on the letter of the Dodd-Frank law.

“No one ever confused Capitol Hill for Mount Sinai,” Keating wrote. “But some today think the Dodd-Frank Act is as set in stone as the two tablets of the Ten Commandments. That's the wrong way to think about any legislation. Every law can be improved, and Dodd-Frank is no exception. Sometimes there are drafting errors. Sometimes a good idea in theory turns out to be unworkable after a closer look in the light of day.”

Keating, who served as governor of Oklahoma prior to joining the ABA executive hierarchy, even insisted that those charged with enforcing the Dodd-Frank Act are often baffled about its contents.

“Not even regulators understand everything in Dodd-Frank,” he continued. “The Federal Reserve Board, which had to implement a Dodd-Frank provision on swaps, said it wouldn't work. ‘You can tell that was written at 2:30 in the morning,’ the Fed's general counsel said. ‘So that needs to be, I think, revisited just to make sense of it.’ That problem has been fixed by Congress and President Obama.”

Keating presented what he dubbed as “Three more common-sense Dodd-Frank tweaks that have bipartisan support:” giving home loans the Qualified Mortgage (QM) status if banks portfolio these loans rather than package them for the secondary market, providing two more years for banks to unwind their investments in collateralized loan obligations, and the creation of “a simple appeals process” that allows banks in “rural and underserved areas” to get a second opinion in the event a regulator incorrectly identifies the customer’s location in a way that limits access to credit.

“It's time to get serious,” Keating said. “The sooner we stop pretending that the law is holy writ, the sooner we can make Dodd-Frank work better for American families and small businesses.”

Jan 26, 2015
'A Long Road To Normal'

Nominated again to lead The Fed, Powell tells Senate committee to expect three rate hikes, but 'if we have to raise interest rates more over time, we will.'

Regulation and Compliance
Jan 11, 2022
CFPB: Complaint Response Worsens At Big 3 Credit Bureaus

Report claims Equifax, Experian, and TransUnion routinely failed to fully respond to consumers with errors.

Regulation and Compliance
Jan 10, 2022
The Fed Names Chairs, Deputy Chairs For 12 Reserve Banks

In recent years, the Federal Reserve System has worked to increase the overall diversity of the Reserve Bank and branch boards of directors and continues to build on those efforts.

Regulation and Compliance
Jan 06, 2022
The Fed: Rate Hike Likely Coming in June

Federal Open Market Committee's December minutes reveal discussion of first hike in federal funds rate in 2Q of 2022, as well as of ending asset purchases by March.

Regulation and Compliance
Jan 05, 2022
AARMR No Protection For Savanah Scares

Conference provides opportunity for regulators to interact, discuss common topics

Regulation and Compliance
Jan 04, 2022
McCargo Sworn In As Ginnie Mae President

Former HUD official becomes the first female to lead the Government National Mortgage Association.

Regulation and Compliance
Jan 04, 2022