How the Frank-Dodd Act has Harmed Americans

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When the economic crash happened back in 2009, a question surfaced in mainstream media: which banks are too big to fail? The ones that were deemed as such were bailed out with American taxpayer money while lawmakers in Washington came up with a new bill.

The Frank-Dodd act was penned by Barney Frank (D. Mass.) and Chris Dodd (D-CT.), and was given the nickname the Wall Street Bailout bill. As Obama signed this bill into law in July of 2010, he declared that “never again” would banks be bailed out by American taxpayer money. Many thought that the new government regulations on the banking industry were a good thing at the time. But four years later, it would seem that those government regulations are costing jobs and doing harm to American families.

It’s a disgusting fact that Wall Street saw record revenue from the bank bailout. Yes, the Wall Street elite made money off of the backs of middleclass Americans through this American taxpayer funded bailout. The very banks who received the bailout ended up having their best two years in investment banking and trading starting with the same year in which they were bailout by American taxpayers.

The regulations from the Frank-Dodd act were a much bigger burden to small community banks than they were to larger ones (larger being assets over $10 billion). There has been a 29 percent increase in the number of big banks, and a 24 percent decrease in smaller ones. In many cases, the larger ones are buying up the smaller ones.

We are now in a situation whereby 44 percent of US banking assets are held by the five largest banks. And where domestic assets are concerned, those same five hold 40 percent of domestic deposits. This is an increase of 23.5 percent since 2000. That being said, if small banks are on the decline because of the regulations in the Frank-Dodd act, then the Frank-Dodd act has added to the high unemployment rate. And when Moms and Dads of school age children are unemployed, it is harmful to the family and also to the economy. You can’t spend what you don’t have – unless of course you work inside the capital building or the White House and have the means to continually print money.

Ironically, JP Morgan, one of the banks that received a bailout, is also is one of the banks that saw record revenue. In spite of that record revenue, they will be laying off 19,000 people over the course of 2014. So much for the jobs of the people who worked for any of the small banks that they acquired.

Bank of America laid off 16,000 people in Q4 of 2012 – a time when there should have been an uptick in job availability because of the approaching holiday season, which usually means seasonal employees are needed. And back in 2011, they confirmed that they’d be laying off a total of 30,000 workers over the next few years.

Citigroup cut the jobs of 11,000 people toward the end of 2012 and into the beginning of 2013. While part of that had to do with freeing up more of their own capital, they also wanted that extra money to invest in dividends. Or another way to put that is that they wanted to invest it in high risk investments in emerging countries such as China, Argentina, and Singapore – markets which are now beginning to overheat and which investors have been pulling out because of an anticipated market correction sometime in 2014.

The problem is not exclusive to American banks. There are also banks overseas that have laid off large numbers of workers. Why? Because already big governments increased government regulations. Interestingly, a recent poll shows that 61 percent of Americans favor a smaller government with less services and less taxes.

As for those in the financial sector who manage to escape being laid off, large banks demand more of their employees. Especially when they are looking for corners to cut so that they can have more available funds. In addition, they generally want to present more availability to customers. So that means that the jobs that they do offer don’t necessarily offer hours that work very well with those who are married and / or have school age children. More and more companies are demanding that employees give them flexibility in their availability, rather than offering employees flexibility so that they can care for their families during normal waking hours – and big banks are some of the worst offenders.