Bank lobby: Dodd-Frank isn’t Scripture

One of the nation’s biggest bank lobbyists is urging Congress to rework the Dodd-Frank financial reform law, arguing the 2010 legislation is far from perfect.

Frank Keating, chief of the American Bankers Association, criticized lawmakers who refuse to revisit the bill or make any changes, and he added that no one should mistake the Wall Street overhaul with biblical teaching.

{mosads}“No one ever confused Capitol Hill for Mount Sinai. But some today think the Dodd-Frank Act is as set in stone as the two tablets of the Ten Commandments,” he wrote in USA Today. “That’s the wrong way to think about any legislation.”

Several liberal Democrats, led by Sen. Elizabeth Warren (D-Mass.) have pushed back hard against any GOP-led efforts to rework the set of new financial regulations. They have painted measures revisiting the law as efforts to reduce its effectiveness.

After accepting some Dodd-Frank tweaks paired with other critical legislation recently, President Obama indicated he would be drawing a harder line in the future. During his recent State of the Union address, Obama said he would veto any legislation that he sees as “unraveling the new rules on Wall Street.”

Meanwhile, the new GOP-led Congress is continuing to push a range of bills making changes, big and small, to the law.

Keating argued that critics who say any changes to the law are efforts to dismantle it are exaggerating. Rather, he outlined several minor changes he believes could be effective changes that do not weaken the overall strength of the law.

One such suggestion would allow banks that keep mortgages they create on their books should be treated as “qualified mortgages,” which provides key legal protections to lenders. Currently, Dodd-Frank requires banks to determine if it is reasonable to expect a borrower to repay the mortgage to receive that status, but Keating argued that if a bank is willing to hold the mortgage itself, then it should be considered safe enough.

He also pushed for a delay to another Dodd-Frank provision requiring some financial institutions to unload on certain securities to meet the new rules. And he argued that there should be an appeals process in place so some banks can challenge a regulators’ decision.

“It’s time to get serious. The sooner we stop pretending that the law is holy writ, the sooner we can make Dodd-Frank work better for American families and small businesses,” he wrote.