Last July, while I was enjoying my blog hiatus, the long-awaited government response to the economic meltdown of 2008 was passed into law by the President. It was a 2,300 page bill, called, the Dodd-Frank Act.
This legislation calls for the establishment of a new federal agency: the Consumer Financial Protection Bureau. The Seattle Times wrote: "This new agency is intended to protect the interests of the average Joe. Housed in the Federal Reserve, it is designed to protect consumers from predatory lending, hidden credit-card fees and the like."
The Dodd-Frank Act has been called, "the most sweeping financial reform since the Great Depression." It not only addresses the $615 trillion-dollar over-the-counter "dark market" of derivatives, but other financial concerns, such as mortgage practices, credit-card fees and car loans. For a brief summary of the law's main points, see http://www.politifact.com/truth-o-meter/promises/promise/422/create-new-financial-regulations/.
Some people feel the new law does not go far enough, while others feel it goes too far. That's what debate is all about.
In principle, I am not opposed to government oversight in areas that affect the health and well-being of the general public. As mentioned last week, one of God's purposes for civil government, according to Romans 13, is to reward those who do good and punish those who do evil. This is necessary in a fallen world.
But will the 2010 financial reform act keep us from experiencing future meltdowns?
Senator Christopher Dodd, co-sponsor of the bill, proclaimed: "I regret I can't give you your job back, restore that foreclosed home, put retirement monies back in your account. What I can do is to see to it that we never, ever again go through what this nation has been through."
Never, ever again? No doubt the shapers of post-Depression financial reform had similar thoughts.
Yes, I think the new laws may help solve some problems. They may cause others. But there are things laws cannot fix.
Not even God's laws can change the human heart.
To be continued...