Who's Happy Now?July 17th, 2010 at 08:39 pm
Referees and umpires figure they've been fair if both teams are squawking at them equally when the game ends. Political writers are pleased if both the Democrats and Republicans bemoan their coverage.
Based on those ground rules, members of Congress who voted for the financial overhaul bill that President Obama will sign next week should feel pretty good about themselves. The nation's biggest banks say the bill went too far and ties their hands. Consumer protection groups say lobbyists convinced lawmakers to water down the bill.
Thomas Donohue, president of the U.S. Chamber of Commerce, denounced the bill: "Today is a sad day for the U.S. economy, for jobs, and for the future of our capital markets," he said. "Consumers will pay the ultimate price in higher fees, less choice, and fewer opportunities to responsibly access credit."
Then there's Congressman Barney Frank, one of the bill's co-sponsors, who complained that, "In some areas the legislation did not go far enough."
The 2,000-plus page bill sprang from the financial meltdown of 2008 that continues to plague virtually everyone, from business owners to employees, and especially those pink-slipped in the past two years. The bill does little or nothing to get us out of the Great Recession. Hopefully it helps keep us out of the next one.
Here are the highlights:
*There's now a process in place to break up troubled financial firms whose quick collapse might seriously harm the overall economy (can you say 'AIG' and 'Lehman Brothers'?). That's the primary reason President Obama keeps saying that taxpayers will no longer bear the brunt when 'too big to fail' institutions fail.
*Hedge funds now must be more accountable to regulators, although they still have more freedom than mutual fund companies. Derivatives such as credit-default swaps, which made our nation's economy look like a house of cards when home prices began tumbling at the end of 2007, also get regulated more.
*Much of the regulation comes from the new Consumer Financial Protection Bureau, designed to keep an eye on credit card companies, mortgage lenders, banks and credit unions. Already on the books is something familiar to most of us: the amount guaranteed on our bank accounts from the FDIC. It's now permanently at $250,000, thanks to the financial reform legislation.
Of course, it's more complicated than that. For example, the new consumer protection bureau doesn't have power to snoop into the lending practices at your local car dealer. Their lobbying group fought hard to keep dealers exempt, and politicians who have been trying to keep American car companies alive decided not to add to the car dealers' challenges.
"It's a victory for auto dealers and for consumers," said Bailey Wood, legislative and communications director for the National Automobile Dealers Association. He says regulation by the new consumer protection bureau would have driven up the costs of auto loans.
On the other hand..."Here we have an industry that came to taxpayers desperate for help, and the American taxpayers saved this industry's hide," said Douglas Heller, executive director of Consumer Watchdog. "Yet, they thank us by using their lobbying might to exclude them from oversight."
See, no one's completely happy. The politicians may have gotten this one right.