Most Americans think banks have grown too big, but many are uncertain about what to do about it, according to a new HuffPost/YouGov poll.
Sixty-one percent of respondents said that banks and other financial institutions have become too large and powerful, while only 17 percent said their size is appropriate. By a 38 percent to 22 percent margin, Americans were also more likely to favor than oppose a law to cap the size of banks and break the largest ones into smaller components. But another 40 percent said they were not sure about that proposal.
Sen. Bernie Sanders (I-Vt.) has said that he will introduce legislation to split banks apart, declaring of the largest, "If an institution is too big to fail, it is too big to exist."
The opinion that many financial institutions have grown too big was shared by majorities of Democrats (68 percent), independents (61 percent) and Republicans (51 percent). But while Democrats and independents were more likely to say they favored breaking up the biggest banks, a plurality of Republicans said they opposed the plan (by 38 percent to 30 percent).
The new poll found that Americans have little faith in the financial sector almost five years after the 2008 financial crisis. Only 9 percent of respondents said they have a lot of confidence in banks and other financial institutions, while 42 percent have some confidence, 32 percent don't have much confidence, and 11 percent have no confidence at all.
Furthermore, 75 percent of respondents said that it's either very or somewhat likely that the country could have another financial crisis in the near future. Only 12 percent said it was not very likely, and only 2 percent said it was not at all likely.
So it's not surprising that 43 percent of Americans said current federal financial regulations don't go far enough. Nineteen percent said they go too far and 15 percent said they're about right.
The HuffPost/YouGov poll was conducted March 27-28 among 1,000 U.S. adults. The poll used a sample selected from YouGov's opt-in online panel to match the demographics and other characteristics of the adult U.S. population. Factors considered include age, race, gender, education, employment, income, marital status, number of children, voter registration, time and location of Internet access, interest in politics, religion and church attendance.
Also on HuffPost:
A main justification cited for the widely-debated bailouts was that regulators lacked the legal tools to effectively wind down large, complex firms like AIG. So in Dodd-Frank, they were given this ability. The FDIC and Federal Reserve have a joint proposal that requires such large firms to submit "living wills," which is expected to be finalized in August. Regulators are also divided over whether to include non-banks, such as certain hedge funds and private equity firms. And the FDIC is still in the process of reaching agreements with other countries to help wind down multinational firms.
Debit Card Fees
One of the most hotly-debated provisions -- setting limits on the charges that banks could charge merchants for the use of debit cards -- pitted giant retailers like Walmart and Home Depot against Mastercard and Visa. Though the financial services industry failed to get legislation passed in the Senate to delay the new requirements, it helped convince the Federal Reserve to raise the fees from 12 to 21 cents that merchants have to pay banks.
One looming battle is over which firms are labeled "systemically important" and therefore subject to increased government oversight. Though banks with more than $50 billion in assets automatically qualify, they are furiously lobbying to even out the damage by getting the feds to include some private-equity firms, insurers and hedge funds in that designation.
The overhaul of the massive market in derivatives -- complex financial instruments widely blamed for exacerbating the financial crisis -- has been delayed until at least October 2012. At that point, a new Congress or new administration might be less interested in taming the sector. House Republicans have also tried another tack, starving regulatory agencies of the funds they need to implement and enforce the upcoming rules.
Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau is also one of the most polarizing elements of the law, with liberals championing its creation and conservatives condemning it as another unaccountable bureaucracy. Much of the drama centered around Elizabeth Warren, the Harvard Law professor who first proposed the CFPB, with Republicans vehemently opposed to her heading the new agency. After months of anticipation, the Obama administration didn't pick Warren, but chose one of her allies, former Ohio Attorney General Richard Cordray, whose nomination did nothing to please the CFPB's GOP opponents. Otherwise, the bureau is on track, with some high-level hires and more than 200 staffers (and 1,000 expected by the end of the year.) Tomorrow, it takes over some powers including making rules for existing consumer financial laws. Yet without a director, it remains hobbled and unable to perform some of its essential duties.
Though Wall Street has vigorously fought new capital requirements -- requiring banks to hold enough capital, so as to survive times of crisis -- arguing that they would restrict lending and growth, most of the rules have been implemented. Earlier this year, regulators finalized a rule which establishes a capital floor for banks.
The Volcker Rule
The Volcker Rule, named after former Fed chairman Paul Volcker, prohibits banks from trading for their own benefit. But it has yet to be implemented, and regulators have still not released proposed rules, thought they face an October deadline. Lobbyists and regulators have been debating the definition of so-called proprietary trading.
'Skin In The Game'
Out of concern that the mortgage crisis was exacerbated since mortgage originators don't have skin in the game, the law required them to retain some of the credit risk of borrowers. But a 20 percent requirement has been opposed by the industry, which claims that it will increase the cost of borrowing. Regulators are seeking comments through August 1, and the final rule won't be ready for at least a few months.
Office of Financial Research
With experts saying that regulators' lack of information and industry data helped prevent them from anticipating the mortgage and credit crisis in 2008, Dodd-Frank authorized the creation of the Office of Financial Research. But the new office, backed by subpoena power, still lacks a director, limiting its effectiveness.