Finally we get the kind of reform and regulations we have needed for years and years to prevent Wall Street and the banks from playing their money games and gambling the economy into crisis. It is pretty great to see our representatives standing up to the big banks and Wall Street, since we usually expect money to control everything in politics. But this time the banks and Wall Street had to bite the bullet, consumer advocates say the bill is even better than they expected and it is apparently even stronger than the president wanted.
Another "Yes We Can" moment for Obama and the Dems.
Another "Yes We Can" moment for Obama and the Dems.
|House and Senate in Deal on Financial Overhaul
Luke Sharrett/The New York Times
WASHINGTON — Nearly two years after the American financial system teetered on the verge of collapse, Congressional negotiators reached agreement early Friday morning to reconcile competing versions of the biggest overhaul of financial regulations since the Great Depression.
A 20-hour marathon by members of a House-Senate conference committee to complete work on toughened financial regulations culminated at 5:39 a.m. Friday in agreements on the two most contentious parts of the financial regulatory overhaul and a host of other provisions. Along party lines, the House conferees voted 20 to 11 to approve the bill; the Senate conferees voted 7 to 5 to approve.
Members of the conference committee approved proposals to restrict trading by banks for their own benefit and requiring banks and their parent companies to segregate much of their derivatives activities into a separately capitalized subsidiary.
The agreements were reached after hours of negotiations, most of it behind closed doors and outside the public forum of the conference committee discussions. The approvals cleared the way for both houses of Congress to vote on the full financial regulatory bill next week.
The bill has been the subject of furious and expensive lobbying efforts by businesses and financial trade groups in recent months. While those efforts produced some specific exceptions to new regulations, by and large the bill’s financial regulations not only remained strong but in some cases gained strength as public outrage grew at the excesses that fueled the financial meltdown of 2008.
Representative Barney Frank of Massachusetts, who shepherded the bill through the House, said the bill benefited from the increased attention that turned to the subject of financial regulation after Congress completed the health care bill.
“Last year when we were debating it in the house, health care was getting all of the attention and it was not as good a bill as I would have liked to bring out because we were not getting public attention,” Mr. Frank said. “What happened was with the passage of health care, the American public started to focus on this.”
Senator Christopher J. Dodd of Connecticut, the Democratic chairman of the Senate Banking Committee, said legislators were still uncertain how the bill will work until it is in place. “But we believe we’ve done something that has been needed for a long time,” he said.
Treasury Secretary Timothy F. Geithner also praised the conference committee for its work. “All Americans have a stake in this bill,” he said. “It will offer families the protections they deserve, help safeguard their financial security and give the businesses of America access to the credit they need to expand and innovate.”
Legislators had aimed to finish their reconciliation work before President Obama travels to a G-20 meeting this weekend in Ontario, and to approve and deliver a final bill for the president’s signature by Independence Day.
At two minutes before midnight Thursday, some 14 1/2 hours after they began work Thursday morning, members of the House-Senate conference committee approved a final revision of the measure known popularly as the Volcker Rule.
The rule, named for Paul A. Volcker, the former Federal Reserve chairman who proposed the measure this year, restricts the ability of banks whose deposits are federally insured from trading for their own benefit. That measure had been fiercely opposed by banks and large Wall Street firms, who viewed it as a major incursion on some of their most profitable activities.
“One goal of these limits is to reduce participation in high-risk activity that can cause significant losses at institutions which are central to the financial system,” Mr. Dodd said. “A second goal is to end the use of low-cost funds — to which insured depositories have access — to subsidize high-risk activity.”
|Lawmakers agree to broad terms for consumer protection agency
By KEVIN G. HALL
WASHINGTON -- Lawmakers on a special negotiating committee narrowing differences in the broader rewrite of financial regulation in generations agreed in principle Tuesday to create a new government agency to oversee credit products offered to consumers.
Senators on the conference committee late Tuesday accepted a host of House of Representatives amendments, all but clearing the way for creation of what will be called the Bureau of Consumer Financial Protection to be housed at the Federal Reserve and partially funded by the central bank.
The panel would address several of the contributing factors to the U.S. financial crisis, especially mortgage lending, a root cause of the crisis. Big non-bank lenders and mortgage brokers, who together exploited gaps in federal regulation or located in states with weak local regulation, will now come under the purview of the bureau. Similarly, payday lenders who have had little direct federal regulation now will be under a regulatory microscope.
"Gaming the regulatory system will become totally something of the past," said Sen. Christopher Dodd, D-Conn., the chairman of the Senate Banking Committee and a lead negotiator.
Read more: http://www.miamiherald.com/2010/06/22/1695013/lawmakers-agree-to-broad-terms.html#ixzz0rqVsHuiA