Press Release - Newt Gingrich: The Lone 2012 GOP Hopeful To Get Specific With Dodd-Frank Criticisms
Newt is committed to running a substantive, solutions-oriented campaign, and people are starting to notice. The Huffington Post reports that Newt is the only candidate to offer specific reasons why he is opposed to the Dodd-Frank financial regulations, which has become a barrier to job creation and housing price stability.
All the 2012 Republican presidential candidates have said they disagree with the Dodd-Frank legislation, and that sentiment has only hardened as the law has slowly taken shape over the past year.
But only one candidate — who is ridiculed as a non-factor in the race — is actually saying anything of substance about it: former House Speaker Newt Gingrich (R-Ga.).
Gingrich stands alone as the sole 2012 hopeful to level specific criticisms at the law on a regular basis. He published a 924-word broadside against the bill on Wednesday morning for Human Events, a conservative publication.
"Dodd-Frank is crippling any recovery in the housing market with overly strict requirements on lenders combined with uncertainty for community banks," Gingrich wrote on the Human Events website. "By cementing the two main roadblocks to recovery, uncertainty and low consumer spending, Dodd-Frank has done exactly what Republicans predicted it would."
Gingrich's argument against the bill focuses on two key components: lending standards and mortgage requirements.
The attempt by Dodd-Frank's authors to prevent another systemic financial collapse led to "too big to fail" rules that classify the largest banks as "systemically important." Gingrich has said this will create "two classes of banks." The largest banks will be seen by investors as having an implicit federal guarantee and will soak up the majority of the cash and equity. Smaller banks, meanwhile, will suffocate under the raft of new regulations, according to Gingrich.
As for mortgages, lenders and originators have an incentive to push for qualified residential mortgages, which are federally guaranteed. Otherwise the lenders have to retain 5 percent of every loan sold to the second market, which helps them alleviate the cost of business. But new rules require homebuyers to put up 20 percent of the sale price as a down payment for any qualified residential mortgage. That is something that is out of reach for many middle class homebuyers.
So, Gingrich and some others say, the law is retarding loans and slowing down any improvement on the demand side of the housing market, which contributes to sustained low prices.
As for the other Republican presidential candidates, their diagnoses have been either simplistic or noncommittal.
Read the full article here.
Newt Gingrich, Press Release - Newt Gingrich: The Lone 2012 GOP Hopeful To Get Specific With Dodd-Frank Criticisms Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/298028