Don't treat Dodd-Frank as holy writ: Opposing view

No one ever confused Capitol Hill for Mount Sinai. But some today think the Dodd-Frank Act is as set in stone as the two tablets of the Ten Commandments. That's the wrong way to think about any legislation.

Every law can be improved, and Dodd-Frank is no exception. Sometimes there are drafting errors. Sometimes a good idea in theory turns out to be unworkable after a closer look in the light of day.

Not even regulators understand everything in Dodd-Frank. The Federal Reserve Board, which had to implement a Dodd-Frank provision on swaps, said it wouldn't work. "You can tell that was written at 2:30 in the morning," the Fed's general counsel said. "So that needs to be, I think, revisited just to make sense of it."

That problem has been fixed by Congress and President Obama. I can think of three more common-sense Dodd-Frank tweaks that have bipartisan support:

• Allowing mortgages to receive "qualified mortgage" status if banks keep the loans on their own books rather than selling them on the secondary market. Banks hold only the safest loans in their portfolios. This fix makes it easier for people to get mortgages.

• Providing an extra two years for banks to unwind complex investments in collateralized loan obligations. Too much haste could result in harmful fire sales that could damage the economy and limit businesses' access to credit.

• Creating a simple appeals process so that banks in rural and underserved areas can get a second opinion when a regulator's mistake, such as labeling a rural customer as urban, gets in the way of good loans to creditworthy customers.

I could name several similar small fixes. All these expose as exaggerations the comments of some that these tweaks would "dismantle" or "gut" Dodd-Frank. Even the Constitution has had two dozen amendments — 10 adopted right away.

It's time to get serious. The sooner we stop pretending that the law is holy writ, the sooner we can make Dodd-Frank work better for American families and small businesses.

Frank Keating is president and CEO of the American Bankers Association. He served as governor of Oklahoma from 1995 to 2003.