Post by dgriffin on Dec 13, 2009 9:37:20 GMT -5
The Wall Street Journal
The End is near .....
House Strikes at Wall Street
Bill Would Usher in Biggest Change to Finance Regulation Since '30s; Curbs on Fed
WASHINGTON -- The House of Representatives, in a display of anti-Wall Street sentiment, passed sweeping legislation Friday that rewrites the rules governing financial markets, aiming to restrict the operations of big banks and the powers of the Federal Reserve.
The legislation, if enacted, would bring the biggest change to financial rules since the 1930s, changing business practices for everyone from mortgage brokers in California to traders on Wall Street. The vote advances a major White House initiative designed to tackle the perceived causes of last year's financial crisis.
The House's action isn't the final word. The Senate has yet to act, and an early version of its bill is different from the House version in many respects. But senators hope to have an agreement in principle by the end of December and to pass a bill in the first half of 2010.
Under the House version, large financial companies including Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. would be hit with billions of dollars in fees and would see new restrictions on their operations.
The bill would strip nearly all of the Federal Reserve's powers to write consumer-protection laws and would allow -- for the first time -- an arm of Congress to audit the Fed's monetary policy decisions, supposedly a politics-free zone. The Fed has fiercely resisted the idea.
For consumers and individual investors, the bill gives shareholders an advisory vote on executive compensation and creates a new Consumer Financial Protection Agency.
The new federal agency would write rules and examine banks for compliance with consumer protection policies on mortgages, credit cards and other products.
The bill, written in large part by House Financial Services Committee Chairman Barney Frank, aims to fill gaps in the regulatory toolkit exposed by last year's crisis. It would give the government the power to break up even healthy financial companies if regulators believe they pose a threat to the financial system. It will also direct the Federal Deposit Insurance Corp. to collect $150 billion in fees from big financial institutions to create a fund to pay for future large failures.
Business and banking groups lobbied hard to kill the bill, particularly the consumer agency, which critics charge would have the effect of restricting credit to consumers.
"Certain provisions in the legislation will undermine our shared goal of market stability and reducing systemic risk," said Timothy Ryan, president and chief executive of the Securities Industry and Financial Markets Association, in a written statement. "We believe there can be additional improvements in the Senate," said a spokesman for Bank of America Corp.
"A new agency is just a whole new bureaucracy," J.P. Morgan Chase & Co. Chief Executive James Dimon said Tuesday at an industry conference.
MORE AT:
online.wsj.com/article/SB126055726422487665.html?mod=rss_Today%27s_Most_Popular
If you thought the Fed was bad, wait till Barney Frank and Pelosi start snapping their whip on Wall St., "for the children," one assumes. I would think that anyone who wants to practice good old fashioned business in America today would be more and more feeling constrained.
