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Former U.S. Senator Chris Dodd spoke with Bloomberg Television’s Tom Keene and Brendan Greeley about the fifth anniversary of the Dodd-Frank act, his namesake legislature.
On the results and success of Dodd-Frank, Dodd said, “I think they’re doing a good job, they’re taking their time to do it. But if I could wish anything I wish they had been able to move along more quickly… time will tell obviously whether or not corrections are needed.”
Dodd added: “The Consumer Protection Bureau is actually doing a very good job. And ‘too big to fail’ is over with.”
When asked about his work with Dodd-Frank and whether he is on conversational terms with Jamie Dimon and Brian Moynihan, Dodd said: “Absolutely. I’ve run into them on a number of occasions and, again, they’ve had frustrations with this. There’s been costs associated with implementation of this. But a friend the other day, I’m not going to tell you which of the major banks it was, that called the CEO and said, I thought I’d never make this call to you. But I want to tell you I’m a better bank today because of your law.”
On the 2016 election, Dodd said: “There’s not a lot of dissimilarities between the people showing up to see Bernie Sanders and seeing Donald Trump. And I think we’re not taking note of that strongly enough, in my view.”
Chris Dodd on Dodd-Frank video and transcript below
TOM KEENE: A special interview now from five years ago. He’s an original card-carrying Watergate class of ’74 member. Christopher Dodd served his and his father’s Connecticut for near on four decades. His crowning achievement Dodd-Frank.
Now 5, count them 5 years on, the Senator from Willimantic joins us from Washington this morning. Senator I know you’re taking a lot of victory laps. I want to push against it (PH). What is your biggest disappointment right now in the implementation of your Dodd-Frank?
CHRISTOPHER DODD: Well, first, I’m delighted, the fact that you know, I’m from Willimantic is very impressive. So thank you for recognizing Willimantic, Connecticut.
Look, it’s taken longer than we would have liked, a lot of this. It’s complicated and I know there are a lot of frustrations. Lending institutions, financial institutions, if there’s one thing they love more than anything else it’s certainty. And when you have as long as it’s taken for some of the rule-making to get into place that’s been frustrating and I appreciate the frustration.
But I think most would agree that it makes more sense to try to get it right then get it quick. So the frustration is tempered a little bit by the fact that I think they’re doing a good job, they’re taking their time to do it. But if I could wish anything I wish they had been able to move along more quickly.
KEENE: You and your father represented the bankers of Greenwich, Connecticut, for years. Are you — is Jamie Dimon and Brian Moynihan your frenemy? I mean, with Dodd-Frank, are you guys on conversational terms?
DODD: Absolutely. I’ve run into them on a number of occasions and, again, they’ve had frustrations with this. There’s been costs associated with implementation of this. But a friend the other day, I’m not going to tell you which of the major banks it was, that called the CEO and said, I thought I’d never make this call to you. But I want to tell you I’m a better bank today because of your law. I’ve got better capital, lower leverage, more liquid assets. Lending is up 30%. We’re now 64 months of generating jobs. I mean this is working.
That’s not to say it’s perfect. Obviously when you have a job of that magnitude there will be clearly be time going down the road where we’ll find things that we either overreacted to or underreacted to. To the extent I suppose that this is not an unfair way to characterize this, but I have people on the so-called Left who say we didn’t do enough. I have people on the Right who said we went way too far. When I get those kind of complains I suspect we got it about right.
There’s greater stability today in our lending institutions. You have greater transparency. The Consumer Protection Bureau is actually doing a very good job. And “too big to fail” is over with. And we believe that to be the case with the stress test, the funeral plans, the resolution authority.
DODD: So we think we’ve done a pretty good job with this. And time will tell obviously whether or not corrections are needed.
BRENDAN GREELEY: Well, let’s talk about time telling the success of any securities regulation is not just in the execution of writing the regulations but the oversight over time, 10, 15 years down the line. Is Elizabeth Warren the right standard bearer right now to hold onto that?
DODD: Well, she cares about this and is very knowledgeable. I mean, one of the problems we have, and I say this respectfully, most members of Congress think they could easily be Secretary of State or President or Secretary of Defense. Very few of them think they could be Secretary of the Treasury.
And so when you talk about improving the learning curve on this and education in terms of financial matters, she actually brings a great deal of knowledge to the subject matter. And clearly, I would have preferred, if one of the things would have differed, I would like to see, have self-funding at the SEC.
DODD: We have self-funding for all the regulators of commercial banks. But when it comes to investment banking and so forth, we don’t. I think that’s a mistake because you can starve these agencies. You’ve seen it happen with the Federal Trade Commission and others.
DODD: I think Elizabeth is a good person.
KEENE: I’ve got to interrupt on the news of the moment.
KEENE: Donald Trump did not go to the Chris Dodd charm school.
KEENE: I know this for certain. What would be your advice to Donald Trump to salvage the train wreck he’s involved in right now? I’m serious. What would be your advice to straighten this out?
DODD: Well, I don’t know. You could jump on him, add all the adjectives that people are adding here. And obviously the accusations about John McCain and others are just ludicrous on their face. But let me say something.
DODD: We’re taking too much time focusing on Donald Trump and his language. There’s another participant in this and it’s called the audience. And people are showing up. Not just because they want to go to an entertainment show. There’s a tremendous amount of frustration. There’s not a lot of dissimilarities between the people showing up to see Bernie Sanders and seeing Donald Trump. And I think we’re not taking note of that strongly enough, in my view.
With all the good news, and there is good news, about the economy improving dramatically, there’s an awful lot of people in our country who are not enjoying the good news. And they’re showing up at these events and looking for answers.
DODD: And so I know everybody wants to jump on Donald Trump–
DODD: And it’s easy and it’s fun.
DODD: But there’s another issue here–
GREELEY: Senator, I’ve got to jump in there. Thank you very much, Senator Chris Dodd of Dodd-Frank.
KEENE: Good morning, everyone, Bloomberg Surveillance. We continue with the Senator from Connecticut, former Senator Christopher Dodd with us. Chris Dodd, whether it’s Willimantic, Connecticut, or Bob Nardelli’s Scranton, Pennsylvania, your comments there linking Donald Trump to Mr. Sanders of Vermont, really that’s almost a third rail of motion now across all of the political landscape is Labor America.
What are we going to do, whoever the next president is, to jump start again Labor America?
DODD: Well, it goes –, this is the point I wanted to make. One more person adding another adjective to describing Donald Trump I don’t think contributes much to the debate. And even though they’re very different approaches to solving problems, that level of frustration, you’re not going to surprise me, that the people who are showing up for Bernie and the people showing up for Donald Trump are neighbors.
They are feeling the same effects of what they believe is stagnation. And their ability to retire with enough income to take care of themselves, that their kids are going to move out of the house and have jobs and afford homes and be able to move forward and educate their children and their grandchildren in some cases.
And so that’s critically important. It’s not just creating the jobs, that’s been the good news.
DODD: With unemployment rates now around 5.3%, what are those jobs? Are we providing jobs enough in areas where there’s going to be the kind of health care benefits, there are going to be pensions, the kind of incomes that are coming in.
DODD: I now represent the Motion Picture Industry as the Head of the MPAA, Motion Picture Association. This is almost 2 million jobs in the country that get up every morning with a job dependent upon the film and television industry. I just use that as an example. Ninety-six percent of the jobs in that business are blue collar jobs, they’re truck drivers, electricians–
KEENE: Well said, well said. Senator, I want to bring it back because of time to Dodd-Frank. Brendan Greeley with some smart questions here.
KEENE: In celebration of five years.
GREELEY: Well, you know, you obviously with the execution of the law that bears your name; the biggest challenge is what they call in DC the blob. The financial lobby. How do you work against the power of that that is constantly working to shift that legislation working forward?
DODD: Well, it’s a great question and you’re exactly right. I was involved in the health care bill. But the health care bill has some financial advocates. Insurance industry, the pharmaceutical industry likes the Affordable Care Act. I don’t have anybody on the other side of Dodd-Frank from the financial sector that loves the bill. I think more and more people are respecting it. They’re doing things they feel are proper and should be doing.
So it’s very difficult. And when you get into the conversation, this is rather arcane subject matter.
DODD: And so financial literacy issue, and I say this respectfully, is not very high when it comes to members of Congress. They just don’t come out of that world. They’re lawyers; they’re other people coming from various industries. Very few run for Congress who come out of the financial services area. So understanding a lot of this is complicated. And so we’ve got a very significant job.
It’s why Elizabeth Warren is important. And whether people like her or don’t like her is not the issue and I think she could frankly care less whether you like her or don’t like her.
DODD: But she’s knowledgeable about this subject matter.
DODD: And I would hope the rhetoric would calm down a little bit. There are wonderful people who work in that sector.
DODD: They don’t need to be maligned, in my view. But we need to be sure we protect this law. People have forgotten, when you have a–
DODD: Huge unemployment–
KEENE: We’re going to have to leave it there. You could go on all day on this, I know.
KEENE: Congratulations on your Dodd-Frank. Senator Dodd, the former Senator from Connecticut.