Dodd-Frank is not the enemy. Bad loans are

The statistician W. Edwards Deming once famously said, “In God we trust; all others bring data.” He might well have been talking about federal bank regulatory policy.

At the heart of the industry-supported push to roll back the Dodd-Frank Act are claims by Republican politicians and industry representatives that the 2010 reform law has been killing lending. These assertions, however, should be backed by data.

According to the most recent Federal Reserve Bank of New York data, not only did aggregate household debt in the U.S. increase substantially in the fourth quarter of 2016, it did so across all loan types; residential mortgages, credit cards, student debt and auto loans all rose. As of Dec. 31, total U.S. household indebtedness was $12.58 trillion, a $226 billion (1.8%) increase from the third quarter of 2016.

In fact, Americans are just 0.8% below the peak level of $12.68 trillion in household debt from the third quarter of 2008. Before they seek to unwind the post-crisis regulations, politicians should remember that 2008 was not a great year.

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