The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111–203, H.R. 4173, commonly referred to as Dodd–Frank) was signed into federal law by President Barack Obama on July 21, 2010. As a response to the financial crisis, the implementation of the Act represented some of the most sweeping changes the U.S. financial markets since the Great Depression.
Among other things, the Dodd–Frank Act changed the oversight and supervision of financial institutions, create a new federal regulatory agency responsible for implementing and enforcing compliance with consumer financial laws, imposed strict regulatory capital requirements, brought about significant changes in the regulation of over the counter derivatives, altered the regulation of credit rating agencies, prompted a number of changes to corporate governance and executive compensation practices, added a new layer of registration to advisers of private funds and brought about momentous changes in the securitization market.
President Trump has promised to review regulations that have the potential to hurt business growth and job creation and Dodd-Frank is among several laws that will be reconsidered by the majority-Republican Congress and the new President. “We expect to be cutting a lot out of Dodd-Frank,” President Trump recently told a group of bankers and other corporate executives, “because, frankly, I have so many people, friends of mine that have nice businesses that can’t borrow money. They just can’t get any money because the banks just won’t let them borrow because of the rules and regulations in Dodd-Frank.”
However, critics have argued that although there are certainly areas of Dodd-Frank that can use repeal and/or extensive tweaking, consumer and commercial lending has actually increased since the enactment of the law.
The emerging fintech sector and alternative lending companies have stepped in to fill the void left by risk averse banks and other traditional Wall Street lenders that abandoned Main Street after the 2008 market collapse. At Imperial Advance, we have a demonstrated record of working closely with small and midsize business owners throughout the country on business financing strategies, including business term loans, merchant cash advances, revenue based financing and lines of credit to help grow and scale their business and contribute to their local communities.
Although a repeal or significant overhaul of Dodd-Frank may be good news to traditional lenders, it is unclear whether consumers or business owners will benefit and those with long memories will remember who was there to provide access to capital when they needed it most over the past seven years.