Members of Congress watch as the President signs the new Wall Street Reform bill into law
Just A few hours ago I received messages from both President Barrack Obama and my local Senator, Jack Reed about Wall Street reform.
There certainly seems to be a lot in this bill, and it is going to be a long process for anyone who wants to dig through the 2,300 pages of new regulation. Reading some commentary on it kind of supports my first impressions, that there are a lot of regulations and monitoring provisions in here, but not really a lot of provisions for action.
The scary thing about this is that so much of the action has been delegated to these new regulatory structures and monitoring groups, that will not have to answer to an election, but will be somewhat insulated from real harsh scrutiny.
Interestingly they are now eliminating the OTS or Office of Thrift Supervision, which was created by President George H.W. Bush in response to the Savings and Loan crisis of the 1980’s and 90’s.
I wasn’t really old enough to understand economics back in the 80’s and 90’s however what I do understand is history runs in cycles.
As newspaperman Malcolm Muggeridge once said “news is old news happening to new people”. In keeping much of the talk around this new reform signed into law by President Obama look eerily similar to one the talk around reform made in the 80’s and 90’s, which clearly failed. Just look at this statement made on August 9, 1989:
“”It’ll safeguard and stabilize America’s financial system and put in place permanent reforms so these problems will never happen again,” Bush said that day of the new law, which created three new federal agencies and eliminated two others.”
Don’t get me wrong, I do not think it is for lack of trying that Wall Street reform is constantly falling short. Rather I think it is because of human nature, and greed. For example another positive thing that the Senate banking committee has been working on is overdraft reform, and yet I know most banks are continuing to charge overdrafts under the old system all the way up until the cut off date without any relaxation in the policies.
On the surface overdrafts may seem like a non-issue for those who properly mange their accounts. That view fails to consider that with many banks overdrafts will be applied even on holds, where not money has not even come out yet, and then items will be rearranged from highest to lowest thereby generating the larger overdraft fees. Because they can then charge $35 fees on a $2, a $1 dvd rental, a $1 candy, a $5 lunch, etc, when in fact the only thing that overdrew you account may had been just an miscalculated automated debit for say $35.
Without further ado here is the text of President Obama’s message:
Friend –
When you and I set out on this journey three years ago, we knew that ours would be a lengthy struggle to build a new foundation for this country — one that would require squaring off against the special interests who had spent decades stacking the deck in their favor.
Today, it is clear that you have shifted the odds.
This morning, I signed into law a bill that represents the most sweeping reforms of Wall Street since the Great Depression, and the toughest consumer financial protections this nation has ever seen. I know that I am able to do so only because the tens of thousands of volunteers who make up the backbone of this movement overcame the most potent attack ads and the most powerful lobbying the special interests could put forward.
Our special-interest opponents and their Republican allies have now set their sights on the elections in November as their best chance to overturn the historic progress we’ve made together.
Organizing for America counts entirely on supporters like you to fight back — no special interests, no corporate PACs. To keep making change and to defend the change we have already won, we need you — and at least 2 other people in North Kingstown — to contribute so we have the resources necessary going into the election.
Please donate $5 today and help Organizing for America lay the groundwork for the fights ahead.
Because of Wall Street reform, we will ensure that Americans applying for a credit card, a mortgage, or a student loan will never again be asked to sign their name under pages of confusing fine print. We will crack down on abusive lending practices and make sure that lenders don’t cheat the system — and create a new watchdog to enforce these consumer protections.
And we will put an end to taxpayer-funded bailouts, giving us the ability to wind down any large financial institution if it should ever fail.
The passage of Wall Street reform is at the forefront of the change we seek, and it will provide a foundation for a stronger and safer economy.
It is a foundation built upon the progress of the Recovery Act, which has turned 22 months of job losses into six consecutive months of private-sector job growth. And it is a foundation reinforced by the historic health reform we passed this spring, which is already giving new benefits to more than 100 million Americans, ushering another 1 million Americans into coverage by next year.
But today’s victory is not where our fight ends.
Organizing for America and I will move forward in the months ahead on the tough fights we have yet to finish — even if cynics say we should wait until after the fall elections. This movement has never catered to the conventional wisdom of Washington. And we have fought to ensure that our progress is never held hostage by our politics.
You and I did not build this movement to win one election. We did not come together to pass one single piece of legislation. We are fighting for nothing less than a new foundation for our country — and that work is not complete. As we face the challenges ahead, I am relying on you to stand with me.
Please donate $5 or more today:
https://donate.barackobama.com/WallStreetReformed
Thank you for helping us get here,
President Barack Obama
Here is the text of Senator Reed’s message:
This morning President Obama signed into law the most significant financial regulation legislation since the 1930s. The Wall Street Reform and Consumer Protection Act will hold Wall Street accountable while better protecting Americans’ retirement plans and other investments.
This law strengthens regulation over credit cards, mortgages, and other financial products that affect every American. Consumers shouldn’t be exposed to unsafe food or drugs, and they shouldn’t be exposed to unsound and risky financial products either.
It includes a tough, new consumer watchdog that can keep up with new scams and predatory products on a real-time basis to prevent American families from being treated unfairly.
And, most importantly, the law eliminates the taxpayer-funded TARP bailout created under President Bush.
As the Chairman of the Banking Subcommittee on Securities, Insurance, and Investment Subcommittee, I have been working on this law for over a year, and I am pleased that it includes a number of key provisions I wrote. Indeed, these reforms will:
Create a new Office of Financial Research that will help provide early warning to regulators about financial problems, and allow regulators to act on that information and keep pace with new financial products being created on Wall Street. by creating a strong Consumer Financial Protection Bureau, which includes an Office of Service Member Affairs that will monitor and respond to complaints from military families.
Close dangerous loopholes and gaps in financial oversight by requiring advisers to hedge funds and private equity funds to register with the Securities and Exchange Commission (SEC).
Hold credit rating agencies accountableby empowering the Securities and Exchange Commission and improving accountability and accuracy within the credit rating industry through a strong new liability provision that allows investors to take action when a rating agency knowingly or recklessly fails to review key information in developing a rating.
Protect investors by strengthening the SEC’s ability to bring enforcement actions, addressing issues revealed by the Madoff fraud, and modernizing the SEC’s ability to obtain critical information.
Create a national foreclosure databaseto give regulators an important tool to monitor and anticipate issues stemming from foreclosures and defaults in our housing markets and better pinpoint assistance to struggling homeowners.
To read my floor statement on final passage of the Wall Street Reform legislation, please click here. You may also wish to visit my website on Wall Street Reform. Finally, the Senate Banking Committee has published an in-depth summary of the law.
Please be assured that I will continue my work of behalf of all Rhode Islanders by supporting initiatives that create jobs, increase access to credit for small businesses, and address the needs of middle class families in such areas as housing, education, and energy.
If you have any questions or comments, please do not hesitate to contact me.
Sincerely,
Jack Reed
United States Senator
Welcome to Wall Street Yields. This site is about all things Wall Street, and about returns on your Wall Street investment, however this site is also about Main Street, and even the side streets and alleys too. That is right even the people on the side streets need to make a living, go figure. One thing that has caused a detrimental effect on our society I believe is the Wall Street’s concern for yields above and to the exclusion of things like sound business, and employee benefits. Despite what they may be teaching in business school a company’s primary responsible is not to their shareholders. Their primary responsible is first and foremost to their clients, then their employees, and lastly to their shareholders. Why is this because the shareholders are not actually performing the work, and may or may not fully understand the work. Money should not buy power, being able to do and understand the work should take precedence over controlling the capital. Controlling the capital is certainly important, but what is of more importance is understanding the business and the needs of the clients and employees, and actually providing them. It is a sad state of affairs when companies cannot provide for basic services such as cleaning, mail room, security, food services, etc in house, but must contract it out to a private company in order to save a buck.
