Have we unlearned financial lessons?

Wall Street went too far, and the country paid a heavy price.

Many areas still have not recovered entirely from the deep recession that the financial industry helped to fuel and aggravated.

In the aftermath, Congress and the Obama White House responded effectively. Whatever its flaws, the Dodd-Frank Act represents a marked improvement in oversight and regulation of banking and related sectors.

Which makes the Financial CHOICE Act, recently approved by the U.S. House, such a misguided piece of legislation.

It would reverse many of the Dodd-Frank advances, leaving the country more exposed to the risk and excesses that proved so harmful.

To a degree, the opposition to the stronger regulation has been hard to follow.

The tea party got its start cudgeling the bank bailouts. Dodd-Frank makes such bailouts far less likely. Yet Republicans don’t call for making precise and necessary repairs. They condemn the act for its overreach.

Consider what House Republicans would do.

They want to weaken significantly the Financial Stability Oversight Council, a tool for seeing the big picture and assessing systemic risk, a missing element as the financial crisis approached.

They would repeal the Volcker Rule, inviting banks and affiliates to speculate again with government-insured deposits.

A key challenge has been designing a mechanism to prevent huge bailouts.

Dodd-Frank launched the Orderly Liquidation Authority, permitting regulators to wind down failing banks. House Republicans would abandon the concept. They would send financial institutions to bankruptcy court, an impractical step, to say the least, when swift, coordinated action is required . ...

... No question, Dodd-Frank needs some fixes, especially in the regulation of community banks.

These banks do not pose a systemic risk. Thus, there is room for easing stress tests and other requirements.

Unfortunately, the Financial CHOICE Act signals lessons unlearned.

As a Brookings Institution analysis recently noted, bank credit growth has been solid, outside the still aching residential mortgage sector. Dodd Frank has worked in the main. An impulse to deregulate risks a return to trouble, when the country lacked the guardrails to protect against Wall Street inflicting such harm.

Read the full editorial from the Akron Beacon Journal at bit.ly/2sjJ6lj