The Dodd-Frank law passed in 2010 in the name of “financial reform” has wiped out another 4,300 jobs: MetLife is closing down its growing mortgage unit, due to new regulations and restrictions contained in the Dodd-Frank law, and related Obama administration policies. “With MetLife’s exit, the market loses another mortgage competitor, diminishing competition and consumer choice,” notes the Wall Street Journal.
MetLife entered the mortgage market in 2008, and managed to achieve a “rising market share” despite a difficult economy and the collapse of the housing market. “Then came Dodd-Frank,” and other new legal and regulatory risks and burdens for mortgage lenders. MetLife as a whole was hit with restrictions harmful to shareholders because of its mortgage business, even though “mortgages were less than 1% of MetLife’s overall business.” So it wanted to sell the mortgage unit to Bank of America or Wells Fargo to escape from those regulations. But it couldn’t sell the mortgage unit, because those big banks don’t want a new mortgage unit, since their existing mortgage business is already unattractive due to “the Obama Administration’s various efforts to halt foreclosures” through government pressure, and “the robo-signing pseudo-scandal” involving the nation’s biggest banks — which will soon have to pay billions to state attorney generals and certain mortgage borrowers even though no one current on their mortgage payments has ever been foreclosed upon due to robo-signing. “So MetLife concluded it was better to shut down its [mortgage] operations, take a $90 million to $110 million after-tax charge, and move on.” Its “investors cheered” its escape from Dodd-Frank’s tentacles, and its stock price rose in response.
The Dodd-Frank Act also will wipe out and outsource thousands of jobs in the financial sector (such as in proprietary trading), and impose billions in new costs on American manufacturers, placing American industry at a disadvantage relative to foreign competitors. It also is disproportionately harming poor people.
The Dodd-Frank law also contains racially-discriminatory provisions that drew criticism from four members of the U.S. Commission on Civil Rights, as well as violations of constitutional separation-of-powers limits. And it gives unaccountable bureaucrats the power to seize certain businesses, effectively barring judicial oversight of any abuses.