In 2008, the bank industry was in crisis and since law makers had missed the opportunity beforehand to do something, action needed to be taken after the fact. The bill became known for the 2 individuals that made lead the hearings Dodd-Frank Act. The Act limited the amount of leverage a bank could take on as well as allowing the Federal Reserve to monitor the bank more closely. In an article by Elizabeth Dexheimer of Bloomberg News some of the details were outlined. In 2008, it was difficult to pick a number but the Dodd-Frank determined if a bank  held greater than $50 billion in assets then the government felt it did many good things and regulations over $50 billion were more stringent than under $50 billion. By 2010 a recovery was underway in the financial institutions, banks began to not like the $50 billion, it was too low. The banking lobby felt $250 billion was a better number. After years of lobby, the number and other measures was passed by the US House of Representatives.

The article notes before you buy a smaller regional bank for your portfolio, if the bill passes through Congress, it will take the Federal Reserve a few months to a year before it changes its rules significantly according to Jared Seilberg an analyst at Cowen.

Linking to dividend paying stocks, all companies have government regulations- some of it should be there, some of it needs to be there and some companies would like to do with less. Which of the some is always the debating issue. A profitable company can handle the regulations, if there are less then the business may feel nice for the moment or until there is a crisis or too much competition for the company’s healthy margins. When that happens a call for more regulation will occur.

There are more questions than answers, till the next time – to raising questions.