The other day I wrote an article explaining why we needed to repeal Dodd-Frank and showing why the Financial Choice Act was better. Today I want to focus more on why Dodd-Frank has been such a colossal failure. One of the most exasperating thing about Dodd-Frank is how effectively the democrats and their media allies have brainwashed the public into thinking that Dodd-Frank is effective.
If you support Dodd-Frank there are certain things you likely believe. The financial crash was caused by giant banks controlling too much of the banking industry so that when they took certain risks and failed they risked taking down the entire economy with them. You also believe that giant banks should be given less power and that a healthy banking industry involves more banks, not less, to foster more competition. Of course you also believe that Dodd-Frank has been successful in producing these results.
Here are some facts regarding the banking industry before and after Dodd-Frank. I will leave it to the reader to decide whether or not it has been successful.
- Before Dodd-Frank there was an average of 170 new banks a year. In the seven years since Dodd-Frank was implemented 3 new banks have opened
- Before Dodd-Frank 4 banks controlled 13% of the banking industry. After Dodd -Frank these same 4 companies controlled 43%
- In case you missed the last bullet after Dodd-Frank 4 companies control NEARLY HALF THE BANKING INDUSTRY
- After Dodd-Frank NEARLY HALF THE BANKING INDUSTRY IS CONTROLLED BY 4 BANKS
- As of 2015 Bank of America controlled the same percentage of the Banking industry as all small banks combined
- Since Dodd-Frank 25% of all local banks have closed
- Of that 25% a quarter have been total failures requiring the FDIC to come in and make sure depositors got their money
- Before Dodd-Frank 75% of Banks offered free checking. After Dodd-Frank 39% did. This is a direct result of less competition
- Before Dodd-Frank there were 14000 banks in America. As of 2014 there were 6900. This number is decreasing every year
Were you concerned about banks being too big to fail before? Has Dodd Frank made this better or worse?