The Dodd-Frank Act became law in 2010, adding more regulation to a banking industry that was already heavily regulated. The main purpose of this 2,300 page act was to give consumers protection against big profit seeking banks but the unintended consequences prove to be much greater. The regulation was supposed to help the little guy but as Acton Director of Research Samuel Gregg writes at The Stream, it actually hurts the little guy.

President-elect Donald Trump claims that he wants to deregulate the financial industry but in order for this to happen successfully, we need to understand the argument for why such actions would be beneficial. Gregg says this:

Consider, for instance, the costs associated with meeting the ever-growing demands of pliance. Such costs are more easily borne by large banks than smaller-sized institutions such munity banks. The result is that excessive regulation makes it harder for smaller banks pete. That often puts access to capital out of reach for many people.

But perhaps the most harm which excessive financial regulation inflicts upon ordinary people concerns the ways in which such regulations can — and have — contributed to financial meltdowns. Such crises are far more likely to hurt those on the lower-side of the economic scale than the already-wealthy.

Gregg goes on in his article to talk about the moral hazard problem of the financial industry and how regulation only contributes to this problem.

Today, moral hazard is used to describe policies and regulations which encourage individuals and businesses to make excessively risky choices — usually with assets entrusted to them by others —because they safely assume they won’t pick up the bill for any failure. Heads, I win. Tails, taxpayers lose.

Indeed, the bigger the bank, the more likely they are to be provided liquidity by governments if they are ever at risk of insolvency: no matter how foolish or irresponsible their behavior. The problem is that the greater the degree of regulatory protection accorded to banks, the more likely it is that banks will engage in irresponsible lending over time.

So who pays the price when moral hazard eventually results in a very large bank taking on far too much risk and finds itself unable to cover its losses? As we learned in 2008, it’s rarely the boards and senior management of such institutions. They’re usually protected by limited liability laws. Instead, millions of taxpayers pay the bill.

Gregg makes it clear that financial regulation hurts the less well-off and financial deregulation can expand opportunity for everyone. You can read Gregg’s full article at The Stream here.