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PolitiFact: Romney appears ready to roll back bank regulations

The statement

Says "Mitt Romney's plan rolls back regulations" on banks.

President Barack Obama, in a television ad

The ruling

Romney has not spoken in detail about his financial regulation plans. Sifting through his website, interviews and his public comments, we see these core elements:

• He would repeal Dodd-Frank, the wide-ranging law that aims to fix many of the lapses associated with the meltdown that brought about the Great Recession. Romney has said he would replace the law but has not gone much beyond that concept.

• Romney supports the idea of regulations. "Extensive regulation is appropriate in an industry that has such an impact on the overall economy," he said in an interview with Time.

• Romney supports rules to ensure that banks have their own money at risk, as this promotes greater caution. "You have to have rules for what kind of capital has to stand behind each kind of asset on Wall Street and banks," he said on 60 Minutes. This is part of current law.

• He supports greater transparency for derivatives trading. Derivatives as investment devices are not inherently bad, but they helped hide the weaknesses of the home mortgage market and increased the exposure of many investors when the sector collapsed. Dodd-Frank has a detailed approach to shedding light on derivatives trading.

• Romney opposes the current plan for orderly liquidations when banks fail. "We need to get rid of that provision because it's killing regional and small banks," Romney said in the first presidential debate. However, he has not said how he would change the current law.

• Romney believes regulators should move faster to define the minimum standards for a home mortgage loan.

The Obama campaign backs up its claim with a Boston Globe story emphasizing that Romney says he would do away with Dodd-Frank without saying what would replace it. Since that time, Romney has said a bit more, captured in that list above, but not much more.

In May, one of Romney's top economic advisers, Glenn Hubbard, said the public could expect more detailed proposals on several key fronts, including what to do if one of the biggest banks fails, consumer financial protections and housing finance. However, those proposals never appeared.

So Romney has provided scant details on his plans, but he has said that he would push for changes. Romney has never suggested that tougher regulations are needed, and he has said many times that government regulates too much. It is reasonable to conclude his plans would be more in line with current Republican initiatives than the current law passed by Democrats. That direction points toward fewer restrictions than are in place under Dodd-Frank. Certainly, Romney has said that the provisions for the largest banks should be replaced.

We rate the statement Mostly True.

This ruling has been edited for print. Read the full version at

PolitiFact: Romney appears ready to roll back bank regulations 11/03/12 [Last modified: Friday, November 2, 2012 6:55pm]
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