'We're Losing A Community Bank Per Day To Dodd-Frank'

COMMUNITY BANKS ARE DYING OF DODD-FRANK

Jeb Hensarling introduced a Republican proposal today that would provide an offramp to Dodd-Frank, but it would first require Wall Street banks to raise capital ratios to 10%, from current levels of 6%. Most small banks already have leverage ratios of 10% or greater.

WSJ

Wall Street banks would be able to break away from the 2010 Dodd-Frank regulatory-overhaul law under a Republican plan—but it would cost them billions of dollars.

The GOP plan released on Tuesday would provide financial institutions, large and small, an alternative to the existing postcrisis regulatory regime. They would be allowed to opt in to the alternative plan if they can surpass critical thresholds, including a 10% leverage ratio, which is a measure of capital held by a bank against its total assets and hence curbs the amount of borrowing, or leverage, banks can do.

“While a 10% leverage ratio may seem high by current standards, history suggests it is far from abnormal,” said Mr. Hensarling, endorsing a threshold long advocated by FDIC Vice Chairman Thomas Hoenig.

Wall Street firms have balked at the leverage ratio, saying it curtails lending and saddles them with more costs that leave them at a competitive disadvantage against foreign banks with lower capital requirements.

Continue reading at the WSJ...

HERE'S THE FULL INTERVIEW

HENSARLING PITCHES AN OFFRAMP FOR DODD-FRANK

With Obama ready to veto, there is absolutely no chance this bill will pass this year, but it does provide a roadmap out of Dodd-Frank that actually increases leverage ratios, and reduces the risk of future taxpayer bailouts.

Comments

[DailyBail]

Anyone supporting Dodd-Frank has to answer this question:

Why do you support regulation that has done nothing to decrease the risk of taxpayer bailouts? That's really what it comes down to, and Dodd-Frank has failed miserably, as the banks are even too bigger to fail now than they were before. If they aren't going to return to Glass-Steagal, which would be the smartest way to fix the problem, then the only way to reduce taxpayer risk is to demand much higher capital ratios.

The big banks will hate this idea even more than they hate Dodd-Frank, which is how you know that this is actually smart legislation put forth by Hensarling. Elizabeth Warren can cry all she wants, and she is definitely crying loudly today. But she is dead wrong on this one. Dodd-Frank is a fucking joke when it comes to bailouts.

[DailyBail]

Bank requires few mortgage documents: Seems like housing deja vu

http://www.cnbc.com/2016/06/07/bank-requires-few-loan-documents-seems-like-housing-deja-vu.html