posted on Jul, 16 2010 @ 07:03 PM
Today marks the passage of the new banking overhaul bill by the Senate. For the most part, I really like it, as it presents a true compromise with the
American people and their security in mind. There are some points/short-falls that I didn't agree with though, such as no reform for Fannie & Freddie
(I'm not sure, but prior legislation with the new requirements for home lending may have already dealt with that though).
Here's a few key points:
1. Govm't is granted to power to liquidate any bank in financial trouble, even the "too-big-to-fail" banks... but it doesn't limit the size of a
banking institution. So, all those monster banks like BoA, Chase, Capital 1, etc won't be going anywhere but up. This kinda sux because of the
lending power still is held mainly by the biggies, which leads way to a pseudo-monopoly in a sense.
2. Govm't is granted powers to break up companies that threaten the economy. This is nothing new though; the Govm't has always maintained the power
to destroy any deemed monopoly or destructive economic scheme. This just gives the Dems another reason to start up another Governmental agency to
enact some sense of control imo.... poor fit for the bill and unnecessary in these times (maybe in the Great Depression when the original law was
enacted but not so much now). There may be more to this issue (I haven't read page 1 of the 2,300 page bill) but it seems unnecessary on the face in
light of present laws. This would also be better if the agency was independent of the Govm't, but more on that later.
3. Banking institutions will be limited on the amounts they can charge for debit card swipes. These are normally upwards of 2%, yet Europe has already
done the same thing and have noticed rates locked as low as 0.2% in some countries. The f'd up thing is that the analysts don't know if this will
help the consumers... hell yeah it is! Lower overhead costs to the seller means a lower product cost to consumers. This will not effect credit cards
though; those will remain around a point & 1/2 (1.5 to 1.6% a swipe).
4. Congress will enable regulators to determine banking salaries, decide when a bank is "too-big-to-fail" and the cash reserves they must keep, and
the types of investments banks can pursue. Ummm, can we say outside influence from lobbyists? This just screams of potential problems concerning
bribes, etc. And, once again, this excludes Fannie & Freddie from any of these regulations.
5. The CFPA (Consumer Financial Protection Agency) and the FSOC (Financial Stability Oversight Council) will be formed (yes, more Government
agencies). The CFPA will be setting the new standards on mortgages (didn't we JUST do this in the last 2 years?!?), payday loans and credit cards.
They'll be within the Fed Reserve and there's not much clarification on the extent of their new powers. The FSOC on the other hand is supposed to
look at the world economy as a whole and allieve any possible hiccups in the system, but their powers are unknown as well. They will also require the
transparency of the derivatives market (real f'n convoluted and confusing investments atm) to a more clear sense, yet it does not require FULL
Mainly, we have 2 new policing agencies that are Government-controlled - this bothers me that they're not an independent watchdog and will be subject
to persuasion from whoever is in office at the time; very similar to the IRS, where if a Repub is in office, the IRS is ordered to "take it easy" on
taxpayers & if a Dem is in office, orders are to collect any & all taxes regardless of taxpayer situations or proper protocol.
That was about all I can remember but I'm sure there's tons more being the length it is. There will also be the Repub reports of the pork contained
or other frivolous crap in this bill in days to come, but for the most part I like it as it stands. There was very little drama involving this bill,
and unlike the Health Care Bill of equal size that took undermining tactics to get passed, this bill passed on it's first attempt. The Repubs stated
that this would be the end of banking when this crap started a few months ago, but apparently settled down after seeing the compromise the bill
contained and the value to the people.... the bill passed 60 to 39 - not a landslide by any means, but still passing in the first try with no daily