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Is Dodd-Frank Lowering Bank Profits? 

November 2, 2015

Investor Ideas

It's been five years since the passage of Dodd-Frank, legislation widely disliked in the financial services industry and a source of constant complaints regarding "too much regulation." In fact -- despite news releases and online news reports to the contrary – there's an argument to be made that Dodd-Frank has been pretty good for the banking industry.

It's sometimes forgotten that just a few years ago the country was facing a financial meltdown. Dodd-Frank - formally the Dodd-Frank Wall Street Reform and Consumer Protection Act - was in large measure a response to the excesses of the go-go mortgage era, that period between roughly 2000 and 2008 when "nontraditional" loans and "affordability" mortgage products dominated the marketplace, loans which sold well because in many cases borrowers could get financing by guessing their income (stated-income loans) or with the knowledge that dubious underwriting standards would likely miss red flags (no-doc loans).

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