By William K. Black
(Cross posted at Benzinga.com)
The Wall Street Journal’s editorial staff (WSJ) criticizes the Dodd-Frank Act and the leadership of the financial regulatory agencies. I share many of those criticisms, but I parted company when the WSJ expressed its horror that: “The regulation micromanages bank decisions down to the kind and quality of loan.” The Dodd-Frank Act bans a “kind” of loan based on the inherently fraudulent “quality of [the] loan.” The Act bans liar’s loans. The WSJ considers this ban so appalling, so obvious a violation of the divine right of banks, that it labels it “micromanage[ment]” and assumes that the label proves the absurdity of banning liar’s loans.