Last year’s Dodd-Frank Act includes a housing finance provision that will make it difficult for the majority of Americans to qualify for the best mortgage rates, according to a financial expert.
David John, a senior research fellow in retirement security and financial institutions, wrote that the provision that was supposed to force lenders to keep part of the mortgages they originate is just one of the many “disparate” and “counterproductive” elements of Dodd-Frank, USNews.com reports.
Another unrelated provision thrown into the bill, according to John, is the creation of the Consumer Financial Protection Bureau. Democrats, who wrote the law, intended on the bureau to protect consumers from predatory lending practices.
“In reality, though, it will limit the kind of financial products that are available and make them more expensive,” John wrote, according to USNews.com. “It also gives government agencies almost unrestrained power to seize corporations that they believe pose a risk to the financial system, with only the narrowest of review by courts.”
In addition, John wrote that the law’s language on the Volcker rule is so poorly worded that even regulators are not sure what they need to do. The rule is supposed to prevent banks from risky investments but the wording is so vague that regulators are confused.
“The old saying is ‘act in haste, repent in leisure,’" John wrote, USNews.com reports. “In the case of Dodd-Frank, it should be 'act in haste, repeal most of it and start over.'"