YellowFever
New member
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Deregulation is coming back! The housing bubble will return soon!
- Thread starter YellowFever
- Start date
Perspective
Well-known member
YellowFever said:
Ain't Trump grand? He's trying to kill the fiduciary rule too. So financial "advisors" can continue to sell regular folk funds with 5%+ loads, high fees, and unnecessary annuities in their retirement accounts. He's also going to kill CFPB efforts to end the payday loan industry.
All hail King Troll and his apologist Congressmen shills of the financial industry!
YellowFever
New member
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Perspective said:
The fiduciary rule was made for trial lawyers. It uses subjective words such as "reasonable" and "excessive" so I think it would've led to tons of lawsuits well outside what the crooked financial advisors sell. People should have the freedom to make bad decisions as long as it's not unconscionable and they weren't tricked or lied to.
If all the regulations are going back to what they were then I would buy a home ASAP if you're still renting. You don't want to be in the position of buying when prices are much higher later on ;D.
Perspective
Well-known member
collected said:
That's certainly what the financial industry has argued vehemently for many months because their commissions/income is in jeopardy. They've convinced you apparently.
The free market isn't perfect. When it's blatantly obvious a group is harming another group for decades, considering regulation is reasonable.
The fiduciary rule has it's flaws. It has it's pros and cons. There are some good aspects to it.Perspective said:
I've been to a few conferences covering this. It puts into place subjective rules like "you can't charge too much" without actually defining what "too much" is. They estimated that the rule would result in billions of dollars worth of lawsuits for subjective stuff. It's estimated that brokerages will have to spend about 4 billion to get compliant. Financial Advisors have already been dropping long term clients or changing their fee structures because it's no longer worth it for them to stay on their current course.
Also, many companies that B2B with broker/dealers are now losing business as too much liability is being put on the broker/dealers and they would rather not take on that liability.
Perspective
Well-known member
spootieho said:
Agreed, it isn't a perfect solution. There rarely are perfect solutions to problems. The question is, would consumers be better off with this regulation in place, or without it? We know the financial industry, and its sales people, would be worse off with this regulation in place.
I work with compliance in the financial industry. I'm going to call you out here. You are completely full of BS. You didn't even give his post adequate consideration before shooting it down.Perspective said:
"Reasonable", "Excessive" and "lawsuits" are exactly what everyone is worried about internally. I was at a compliance conference a few months ago and the situation was panic. Nobody knows what "reasonable" is. Nobody knows what "excessive" is.
Perspective said:
You can argue that good will come out of this because the broker/dealers are scared shitless. They are going to better look out for their clients.
I don't, however, like vague rules and laws that are open for interpretation with the risk of going out of business. I've seen quite a few broker/dealers working hard to be compliant and then go out of business because a stupid employee or two broke a rule. Those employees actually broke a real rule. When the rules become vague, it creates a scary situation.
I work with a lot of Financial Advisors and many of them aren't very bright. I wouldn't trust my money with most Financial Advisors.
Perspective
Well-known member
spootieho said:
Tell me where my point is wrong, rather than resorting to ad hominems.
Perspective
Well-known member
spootieho said:
You provided your CV to buttress your point, and made no point, other than to call my comment BS.
ad hominem - adverb & adjective
(of an argument or reaction) directed against a person rather than the position they are maintaining.
Ah, you posted above this comment. The rule is complex. I'm prepared to get into the specifics; but it might be easier just to ask - Are consumers better off with this rule, than without it?
It's unavoidable in our democratic legislative process, but this rule was much cleaner, less vague, as initially introduced, for whatever that's worth.
gld2 said:
That depends on how the market will respond. If banks get more loose with their loans, it's likely more people will be able to get loans with less of a safety bubble. If the economy takes a downturn again, those people who don't have a safety bubble will default. If enough people default, home prices will drop. If it's easier to walk away, more people will walk away.
Prices in certain areas will go up as demand goes up. Areas that didn't recover so well after the last crisis will see a bigger boost in their home values.
Perspective
Well-known member
gld2 said:
Well, if the Ability to Repay Rule in Dodd-Frank were repealed, consumers would lose the right to sue a creditor for making a mortgage loan to them they couldn't reasonably afford to repay:
https://www.consumerfinance.gov/pol...andards-under-truth-lending-act-regulation-z/
Presumably, some creditors might re-enter the mortgage space offering NINJA negative amortization loans with teaser rates. That would have the effect of raising housing prices.
That depends on the consumer. Keep in mind that it does increase the costs to manage your money.Perspective said:
In aggregate, I'd say the consumer is better off with it. That doesn't justify passing a poorly written law, though. Just think of all the extreme possible hypothetical scenarios where a bad law can benefit some people.
Perspective
Well-known member
spootieho said:
Agreed. Dave Ramsey rails against the rule like it's the end of the free market. He's also a big fan of 5%+ front loaded funds in retirement accounts.
usctrojancpa
Well-known member
spootieho said:
Aka once you start hearing about banking getting looser with their capital start buying IE real estate.