Peter Wallison provides chapter and verse on what’s wrong with Dodd-Frank, and zeroes in on one particularly nasty part of the law that no one has talked about, but should:
. . . Title II of Dodd-Frank gives the secretary of the Treasury the authority to seize any financial firm he believes is likely to fail in the future and hand it over to the FDIC for liquidation. If the firm objects, the secretary can apply to a court for a ruling, but the court has one day to decide whether the secretary has acted unreasonably. Stays and appeals are prohibited. If the court does not act in that one day, the firm is remitted to the FDIC “by operation of law.” Again, it will be a bold firm that challenges the administration in power if the Treasury secretary has this authority.
For this reason, if Obama is reelected, the U.S. financial system’s historic independence from government will be substantially changed. Like the health-insurance industry under Obamacare, the financial industry will fall under government control. [Emph. added]
Thus the government will effectively be able to seize any institution, at any time, for any reason (the Treasury secretary merely has to get it into his head that the firm is likely to fail for some reason) and he can do so with basically no due process or real opportunity for appeal. Wonderful. I can’t imagine the government being tempted to stretch or abuse its new authority. . . . This makes the CFPB look positively benign by comparison. . . .