To the Congressional Banking Committee,

The Dodd-Frank Consumer Protection Act is a flawed piece of legislation. I believe that

the regulation is ill-written in many different ways. I am writing to inform the Congressional

Banking Committee on the defects of the act and to encourage the Committee to repeal it.

Dodd-Frank was a well-intentioned piece of legislation, meant to prevent another

financial crisis. The bill would increase regulation on large banking firms previously thought to

be “Too big to fail”, the regulation was intended to decrease speculative investing, and

implement increased stress testing. Though it might seem logical and reasonable on paper, in

practice it leads to unnecessary red tape and unintended consequences.

One of these unintended consequences is its encouragement of riskier investments. For

example, Dodd-Frank dictates that banks hold certain types of collateral, the regulation forced

banks to use treasury bonds and mortgage-backed bond as collateral. The latter of which was a

significant contributor to the 2008 financial crisis. Another unintended consequence is the

practical monopoly status granted to these large financial institutions. The extra red tape the

Dodd-Frank Act doles out discourages smaller financial institutions from increasing their assets

and lending more, in fear that they might reach the large bank threshold, and therefore be under

the jurisdiction of Dodd-Frank regulators. Additionally, the guarantees granted to the larger

banks by the regulators encourage a flight of capital to these larger banks, therefore it is no

surprise the amount of capital owned by the larger institutions has increased to 75% from the

level of 50% when Dodd-Frank was enacted1.

1
Ezrati, Milton. “Dodd-Frank Desperately Needs More Reform.” Forbes, Forbes Magazine, 21 Aug. 2018,
www.forbes.com/sites/miltonezrati/2018/08/21/dodd-frank-desperately-needs-more-reform/#28bcf6f218c6
 The secondary problem with Dodd-Frank is the unnecessary red tape. Though there are

many examples of this I will use the resolution plans as my primary example. The resolution

plans require these big banks to write a few hundred page essay every year of how they will

handle a crisis2. This unnecessary piece of red tape trivializes disaster preparedness in the same

way that school trivializes learning. The rewriting of the same essay every year just leads to

headaches and bloated regulative bodies.

Most opponents will argue that banking regulation is necessary to prevent another

financial crisis. I would agree with them. However, I believe that Dodd-Frank was not what we

needed. Dodd-Frank was written by politicians who have spent most of their adult life in Capitol

Hill, and who barely know how a savings account works. This is why I encourage the voting

members of the Congressional Banking Committee to move repealed legislation to the floor so

that there may be a vote held.

Sincerely,

Nikori Kehoe

2
​“Living Resolutions .” T
​ he Fed - Money Stock and Debt Measures - H.6 Release - April 26, 2018​, Board of Governors of 
the Federal Reserve System (U.S.), www.federalreserve.gov/supervisionreg/resolution-plans.htm.