Would Romney Spell the End of Dodd-Frank?

According to Phil Mattingly, who wrote an article for Bloomberg.com entitled, "Romney's Dodd-Frank Kill Pledge Collides With Wall Street Agenda," many people are not optimistic about the Act's future under a Mitt Romney presidency. Barney Frank himself had the following reaction:

"It would be the death of it," he said.

Perhaps Representative Frank's pessimism was fueled by the following comment that was made by Romney last month:

“I’d like to get rid of Dodd-Frank and go back and look at regulation piece by piece,” Romney told the guests at a London fundraiser last month. “I very much believe in updated regulation, but I believe Dodd-Frank has gone beyond what was appropriate for the sector.”

From a purely libertarian perspective, the solution would be to eliminate Dodd-Frank and let the banks fend for themselves. But does anyone really want banks to fend for themselves completely? Do we want to get rid of FDIC protection? I don't think so. Once this concession is made, the door flies open and other concessions are now up for discussion. What about "too big to fail?" What about the Volcker rule about proprietary trading?

An intelligent discussion of this issue moves beyond party affiliation. It involves looking at Dodd-Frank more closely, examining each part in greater detail and deciding which parts are worth keeping and what needs to be thrown away.

The New York Times explored this issue in a Chris Nicholson article from 6/28/10--"The Dodd-Frank Bill Up Close."

One of the clearest measures taken against “too big to fail” — which the bill purports to end — is Title I, Sec. 121, called “Mitigation of risks to financial stability.”

If the Financial Stability Oversight Council, a creation of the overhaul, decides that a bank with more than $50 billion in assets “poses a grave threat to the financial stability of the United States,” the board can vote:

(1) to limit the ability of the company to merge with, acquire, consolidate with, or otherwise become affiliated with another company;
(2) to restrict the ability to offer a financial product or products;
(3) to terminate one or more activities;
(4) to impose conditions on the manner in which the company conducts one or more activities; or
(5) if the Board of Governors determines that such action is inadequate to mitigate a threat to the financial stability of the United States in its recommendation, to sell or otherwise transfer assets or off-balance-sheet items to unaffiliated entities.

This is too much regulation for my taste.

Another website, www.doddfranksummary.com, provides additional information. All the new agencies that are created under this Act are listed and written about. Of particular interest is The Investor Protection and Securities Reform Act of 2010. Shareholders can now "participate in a non-binding vote on executive compensation at least once every 3 years," among other things.

What do you think? Which parts of Dodd-Frank would you keep? What would you get rid of?