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Corrupt Government Title: US House passes financial reform bill US House passes financial reform bill By Tom Braithwaite in Washington Published: December 11 2009 19:45 | Last updated: December 12 2009 00:02 The Obama administration won a victory for its vision of financial reform on Friday, heading off a rebellion by conservative Democrats in the House of Representatives to pass a landmark regulation bill. The legislation included a new Consumer Financial Protection Agency, an innovation fiercely opposed by banks and some Democrats. Lex: Financial regulation - Dec-11 US pay tsar expands pay rules - Dec-11 Insight: The Fed’s lead role in financial regulation - Dec-09 Blog: Money Supply - Oct-07 Call for global bank reform - Dec-09 Interactive feature: Financial regulation reform - Jul-30 In the final vote, 27 Democrats – and every Republican present – opposed the bill, which gives the government the power to seize and wind down a failing financial institution, to push more derivatives through clearing houses and to give investors a non-binding vote on directors’ pay. President Barack Obama applauded the passage and said: “The crisis from which we are still recovering was born not only of failure on Wall Street, but also in Washington. We have a responsibility to learn from it, and to put in place reforms that will promote sound investment, encourage real competition and innovation, and prevent such a crisis from ever happening again.” In one victory for the banks, an amendment that would have allowed a bankruptcy judge more power to reduce mortgages of financially struggling borrowers was defeated. But the battle centred on the CFPA – one of the most prized parts of President Barack Obama’s regulatory overhaul – and the wrangling between Democrats highlighted differences that could return as the Senate considers its equivalent bill over the next few weeks. “One of the responsibilities of the consumer agency will be to issue rules to prevent the kind of abusive mortgages that had such a contributing role in our crisis,” said Barney Frank, the Democratic chairman of the House financial services committee, who managed the bill. Walt Minnick, a Democrat from Idaho, who led the rebellion on the CFPA, which strips power from existing banking regulators, said: “You don’t achieve better regulation by splitting the responsibility between two regulators, in many cases thousands of miles apart.” David Hirschmann, a director of the US Chamber of Commerce, said: “While there is a laundry list of bad choices that were made by the House, the creation of the CFPA tops the list.” However, he said he was encouraged by the “growing group of moderate Democrats” who helped amend the bill to prevent states from setting tougher consumer protection standards. Another provision that has been resisted by banks allows regulators to impose a loss on creditors of failing financial institutions that need to be seized by the government. After stark warnings that the provision would make credit less liquid and more expensive, the size of the “haircut” to be imposed on creditors was reduced to up to 10 per cent and some securities were exempted. But it stayed in the bill. Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 1.
#1. To: Joe Snuffy (#0)
I'm sure he tried really hard. He's already got his pound of flesh- plus some.
There are no replies to Comment # 1. End Trace Mode for Comment # 1.
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