Senate Passes Sweeping Finance Overhaul
The bill, which Mr. Obama expects to sign into law next week, marks a sea change for the financial-services industry. Mammoth financial firms such as J.P. Morgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp. face major changes to almost every part of their businesses, from debit cards to derivatives trading and the ability to invest in hedge funds.
Not only will they face new leverage and capital requirements, but also regulators with broad new authority to curb or outlaw risky behavior. The changes are in store despite Wall Street’s aggressive efforts over the last year to water down or derail the bill.
The measure, once implemented, will touch all areas of the financial markets, affecting how consumers obtain credit cards and mortgages, dictating how the government dismantles failing financial firms and directing federal regulators’ focus on potential flashpoints in the economy.
The legislation will radically alter the way regulators work to assess and respond to potential flashpoints in the economy. The Federal Reserve will be empowered to supervise the largest and most complex financial firms, working in tandem with a new Financial Stability Oversight Council made up of financial regulators that will have the ability to act aggressively against potential risks.
Derek Thompson lists 7 Reasons to Be Skeptical About Financial Reform
1. The Bill Has Lobbyists’ Finger Prints All Over It.
2. The Bill Doesn’t Deal With Fannie, Freddie, Credit Runs, or Leverage.
3. Community Banks Are Afraid FinReg Will Hurt Them, Too.
4. Financial Reform Won’t Protect Taxpayers From a Future Bailout.
5. A Derivatives Loophole Could Cost Main Street $1 Trillion.
6. Can You Trust a Bill That Requires 79 Years of Cumulative Studies?
7. We Failed to Kill ‘Too Big to Fail.’ In Fact, We Might Have Made It Stronger.
Read Derek’s post, and add one more item to the list: the Community Reinvestment Act is still law.
And, Republicans Scott Brown of Massachusetts, Olympia Snowe and Susan Collins, both of Maine, gave the Dems the needed 60 votes. Thanks a lot, guys. You should have allowed the Dems to own it.
