Congress passes financial reform bill

Posted by AzBlueMeanie:

The Senate today finally passed the financial reform bill when the mythical moderates from Maine, Sens. Susan Collins and Olympia Snowe, and former Tea Party heartthrob-turned-traitor Sen. Scott Brown of Massachusetts gave Democrats the 60 votes needed for cloture to end the GOP filibuster. One Democrat, Russ Feingold of Wisconsin voted no, saying the bill was not strong enough (so he would prefer the status quo to some very progressive regulation of the financial services industry?) The final vote was 60-39. Congress Sends Financial Overhaul Bill to Obama – NYTimes.com.

Back in In February House Minority Leader John Boehner met “over drinks” with JP Morgan Chase CEO Jamie Dimon, where he “made a pitch” for Wall Street support by explaining that “Republicans had stood up to Mr. Obama’s efforts to curb pay and impose new regulations.” Sen. John Cornyn (R-TX), chairman of the National Republican Senatorial Committee, “said he visited New York about twice a month to try to tap into Wall Street’s ‘buyers remorse’” with Democrats.

In April, Senate Minority Leader Mitch McConnell traveled with Sen. Cornyn to New York for a private meeting with about 25 Wall Street Executives, many of them hedge fund managers. The purpose of the meeting between the top Republicans and the financial executives was to enlist “Wall Street’s help” in funding Republican campaigns in the fall and killing any tough financial reform.

These painted up whores for the banksters of Wall Street did everything they could to preserve the status quo for the reckless and irresponsible greed that nearly destroyed the world's financial system and economy in 2008. Lobbyists for Wall Street banks spent a record amount on lobbying Congress against financial reform in the first half of this year. Bank lobbyists have already turned their attention to lobbying the regulatory agencies on rule making. NYT: Lobbying shifts to regs on finance reform bill.

Minutes after the Wall Street reform bill passed, House Minority Leader John Boehner called for its repeal, saying the legislation penalizes Main Street bankers for the crimes of a few on Wall Street. Boehner: Repeal Wall Street Reform. "It's a nuclear weapon to kill an ant!"

Eddie Vale, a spokesperson for the AFL-CIO, had a ready reply.

"First Boehner wants to take away working families health care benefits. Now he also wants to return Wall Street and the big banks back to the power they had when they destroyed our economy" said Vale in an email Thursday. "It could be no clearer for working families in 2010 that there is a clear choice between continuing to move forward to make the economy work for everyone again or go backwards to the Bush years where corporations and Wall Street ran wild."

This is a fair characterization. The modern Republican Party represents the banksters of Wall Street, global corporations and the über-rich whose unregulated greed — thanks to Republican deregulation of the financial services industry — nearly destroyed the world's financial system and economy. When it all blew up, President George W. Bush rescued his bankster buddies on Wall Street with the TARP bailout. Executives and traders collected their bonuses and TARP funds were used to lobby against any financial reforms. Banks Spend TARP Funds on Anti-Consumer Lobbying. The painted up whores in the Republican Party went to work in Congress to block any financial reforms. The Republicans failed.

It defies comprehension that the average hard working middle class American would ever vote Republican when the party does not represent their interests.

Passage of the bill heralds the end of more than a generation in which the prevailing economic orthodoxy in Washington toward the financial industry was largely one of hands-off admiration, evidenced by steady deregulation. Congress Sends Financial Overhaul Bill to Obama – NYTimes.com:

While the measure does not fully restore the toughest restrictions imposed after the Great Depression, [i.e., Glass-Steagall Act], it is a clear turning point, highlighting a new distrust of Wall Street, fear of the increasing complexity of technology-driven markets, and renewed reliance on government to protect the little guy.

The bill would create a council of high-level federal officials, led by the Treasury secretary, to try to detect, and perhaps prevent, systemic dangers to the financial system, and it would give the government new authority to seize and shut down failing financial institutions, by liquidating assets and forcing shareholders and creditors to take losses.

It would create a powerful consumer financial protection bureau, to be housed in the Federal Reserve, and widely expand the regulatory authority of the central bank. It would widen the purview of the Securities and Exchange Commission to strengthen regulation of hedge funds, other private equity firms, and credit rating agencies.

The bill also seeks to curb the most risky behavior on Wall Street, by restricting the ability of banks to invest and trade for their own accounts — a provision known as the Volcker rule, and by creating an extensive regulatory framework for derivatives, the complex financial instruments that were at the heart of the 2008 crisis.

* * *

For most average Americans the impact of the legislation may not be readily apparent, but its far-reaching effects will not be far below the surface. The legislation will impose new rules and restrictions on mortgage lenders, and it will direct the Federal Reserve to set new pricing for interchange fees charged by debit card issuers.

The bill will restrict what many banks can do with their customers’ deposits. Businesses of all sizes, across every sector of the economy, will feel the impact of the rules for derivatives, which are used to hedge against swings in the cost of raw materials, gas and oil prices, and foreign exchange rates.

The legislation has some notable exemptions, including a special exception for the nation’s automobile dealers from oversight by the new consumer financial protection bureau [let's call this the "Jim Click exception"], which otherwise will regulate most consumer lending.

Sen. Christopher Dodd (D-CT), the manager of the bill in the Senate, explained that Congress had done its utmost to achieve the best possible bill, given the reality of needing Republican obstructionist votes in the Senate.

“The American public expects nothing less of us than to fashion proposals that will minimize great risks to them,” he said. “None of us lost a job or a home in the last two years. None of us has watched our retirement account evaporate overnight. None of us will worry about whether our children can get a higher education. That all happened to the people we represent across the country.”

Mr. Dodd continued: “They are asking that we do our best. They don’t ask for perfection. They know we have not solved every problem and that we are not going to bring back their homes and their jobs; but they expect us to respond to the situation that brought us to the brink of financial disaster. This is our best effort to do so.”

It's not everything I wanted, but its a good start. What I am still waiting for is "someone's going to emergency, someone's going to jail."