The Boston Globe has an article about how the Dodd-Frank law is forcing a carpenter's union to float an initial public offering of a bank that it had founded:
The transformation of the 30-year-old institution was triggered by financial reforms designed to curb the speculative investments by banks that contributed to the recent economic crisis. The Dodd-Frank Act requires a firewall between an institution's traditional banking practice and its trading and investment activities.
Since the New England and New York carpenters' pension funds own a majority stake in the bank, they are barred from engaging in investments that are common among pension funds, such as in private equity and real estate, said Mark Erlich, executive secretary for the New England Regional Council of Carpenters and chairman of the pension fund.
"The last bank that Dodd-Frank was designed to impact was First Trade Union Bank," Erlich said. "As is always the case in any kind of legislation, there are unintended consequences."
The Massachusetts carpenters union started the bank in 1987, using its pension funds, with the expectation the bank would help finance projects that used union labor. The bank also holds the deposits of pension funds and counts carpenter union members as its customers.
Erlich's words — "As is always the case in any kind of legislation, there are unintended consequences" — should be chiseled in marble or granite into the halls of Congress and the legislative chambers of the 50 states.
