August 26, 2011
Dodd-Frank: Mitt Romney Looking for a Repeal
The leading Republican contender for his party’s nomination – Mitt Romney – apparently would like to roll back the clock, take another swing at regulatory reform and repeal Dodd-Frank, or at least parts of the year-old law. Here are excerpts from a recent Boston Globe article:
In the past, Romney has criticized the bill for creating uncertainty in the financial industry and causing bankers and the financial service employees to pull back. Today, he went further and said he would repeal Dodd-Frank, if he were elected president. “The extent of regulation in the banking industry has become extraordinarily burdensome following Dodd-Frank,” Romney told a roundtable of 18 businessmen at The Common Man Restaurant.
“I’d like to repeal Dodd Frank, recognizing that some revisions make sense,” Romney said. In July, Romney was unable to name specific parts of the bill that he liked or disliked. When asked, he said only, “It’s 2,000 pages. I’m sure there’s something in there that’s good…I’d be happy to take a look at it perhaps line by line at some point and lay out the provisions that I think are unfortunate.”
Today, he was more specific. Romney said he believes it does make sense to regulate derivatives. He said it also makes sense to have different capital requirements if someone is holding a home mortgage compared to someone holding high-risk securities. “Some features have to be addressed,” he said. At the same time, he said, the 2,000 pages of the bill are “overwhelming” for community banks and the fact that pages of rules must still be written creates too much uncertainty.
It’s always fascinating to see which business issues become focal points in the Presidential campaign. Last time around, CEO pay became a high profile issue and that may well happen again. I’m not sure why the length of Dodd-Frank itself should be an issue. I suppose it has to do with the “smaller & less intrusive government” movement – and the sheer length of a bill somehow becomes a proxy for its true impact. Candidate Herman Cain initially wanted bills to be limited to 3 pages!
I guess Romney is betting that most of the voting public won’t recall that it took Congress over two years to pass anything in response to the financial crisis (not that I think that Dodd-Frank is perfect by any stretch of the imagination). So the question remains: “How long a piece of legislation did that near-Depression warrant?” Take the poll below…
In more political news, according to this LA Times article, Rick Perry will be hamstrung by new SEC rules that inhibit donations from financial services company employees to sitting governors.
The PCAOB’s Upcoming Roundtable on the Auditor’s Reporting Model
Yesterday, the PCAOB announced that it will host a roundtable on September 15th to discuss its recent concept release on possible changes to the auditor’s reporting model. Here’s the related briefing paper. Here’s some thoughts from Jim Peterson’s “Re:Balance” Blog on the concept release.
Poll: Congressional Legislation & Does Size Matter?
Please take a moment for this anonymous poll:
– Broc Romanek