In February, President Trump signed two executive orders designed to weaken, or replace the current financial regulations.
Doing so, However, would return our country to a less regulated pre-financial crisis and exposing investors and Americans to the same risks in 2007, 2008 and 2009.
There are two regulations under attack – Dodd-Frank Wall Street Reform and the Consumer Protection Act of 2010.
Dodd-Frank, a set of regulations was signed into law in response to the financial crisis designed to limit risks and protect consumers. Basically looking out for the little guy.
The CFPB (Consumer Financial Protection Bureau) was established through Dodd-Frank, describes itself as “a U.S. government agency that makes sure banks, lenders and other financial companies treat everyday Americans fairly. It helps protects consumers from predatory schemes in credit cards, mortgages and student loans.
What if CFPB lost its power? Well, More mortgages could be written, delinquencies would increase, homeowners would probably use too much leverage with risky financial instruments no one truly understood. Short term would boost the economy, long term would cause the economy to crash as it did in 2008.
Some proponents of less regulation, who feel less government restrictions will inevitably lead to higher revenue and earnings, believe there are dangers that should be acknowledged. We could be pushing ourselves toward another financial mania-which would certainly not be helpful for investors, consumers or banks.
My advice-Buy Real Estate now and sell in 3 to 4 years!
Instant gratification has never translated to long-term stability!
Harry S. Berry
Harry Berry Realty, Inc