I guess that’s settled
June 8, 2010 | alternatives, federal legislation, industry | Comments (0)The conference is set to begin on Thursday, but today’s Huffington Post reports this:
A provision despised by credit card companies will remain in the final Wall Street reform bill that emerges from conference committee negotiations, Sen. Chris Dodd (D-Conn.) told reporters Monday evening.
Dodd, who is leading conference negotiations for the Senate, said that changes will likely be made to the “swipe fee” amendment that was included in his chamber’s version. Sponsored by Sen. Dick Durbin of Illinois, the number two Democrat, the amendment would reduce the fees that credit card companies can charge to retail stores for using the cards. The current fee far exceeds the cost of the transaction, which stores pass on to consumers. The fee is a lucrative source of revenue for credit card companies and hated by merchants.
Prudent consumers
June 8, 2010 | federal legislation, industry | Comments (0)The Wall Street Journal covers a speech by Fed Board member Elizabeth Duke:
“I have every confidence that competition will ultimately restore innovation, but with products that are safer, simpler, and more transparent to consumers,” Fed Board Governor Elizabeth Duke said, outlining five principles that she believes can guide industry and policymakers toward “balancing access to credit and sound risk management.”
Those five principles: enhanced consumer protection, prudent underwriting, transparency, easy to understand credit disclosures and retail mortgage contracts, and rules that stifle competing interests that negatively impact consumers. If employed effectively, these principles could protract the “robust system” that Duke said is necessary for economic growth.
Can’t argue with the principles. But what if the practice of “consumer protection” leads to limite choice?
Latest
June 8, 2010 | federal legislation, industry | Comments (0)From Congressional Quarterly (no link because it’s a subscription service):
“The big question is, ‘Where are the divisions going to be among Democrats?’ ” said Bert Ely, an independent financial analyst. “The Democratic Caucus has a wide range of ideology.”
The Senate last month appointed seven Democrats and five Republicans to the conference committee. House leaders are expected on Wednesday to nominate eight Democrats and five Republicans.
The current plan is for the conference to meet formally June 10 to install House Financial Services Chairman Barney Frank, D-Mass., as the panel’s chairman and hear opening statements. That will provide the first firm clues in weeks to whether Democrats will be able to gel.
Are we forgotten?
June 8, 2010 | federal legislation, industry | Comments (0)Politico headline this morning: “Banks queasy as reform deal nears.” Substitute “payday lenders” in the headline for “banks” and see if that works for you.
Gearing up against the car dealers
June 7, 2010 | alternatives, federal legislation, industry | Comments (1)Seems to be a big fight brewing. From the story:
The bill passed by the House exempts auto dealers from the agency’s oversight, courtesy of an amendment sponsored by Rep. John Campbell (R-CA). The Senate bill does not include a similar exemption, but the upper chamber did pass a “motion to instruct,” sponsored by Sen. Sam Brownback (R-KS), directing the conference committee that will reconcile the two bills to defer to the House’s version.
Clearly, auto dealers have significant clout on Capitol Hill. There are 18,000 of them scattered across the country, and their lobbying arm, the National Automobile Dealers Association, threw its weight around in favor of the exemption. Since 2007, trade groups for auto dealers spent $12 million lobbying. Auto dealers, their employees, and political action committees donated $9.3 million to candidates during the 2008 election cycle.
Notice how they dredge up the campaign contributions and lobbying efforts?
We’re with this guy
June 7, 2010 | federal legislation, industry | Comments (0)From the story:
Former Federal Reserve economist Robert Bliss cautioned lawmakers on Friday against moving too fast to complete work on the Wall Street reform bill, saying a rush could produce unintended consequences down the road.
“Some of the changes are positive, but others could create bigger problems than the one they are trying to solve,” he said about the bill in prepared remarks.
Like how to make $300 loans to working Americans.
Latest
June 7, 2010 | federal legislation, industry | Comments (0)We’re hearing that the House will appoint conferees on Wednesday and the conference will begin on Thursday.
Out on a limb
June 6, 2010 | federal legislation | Comments (0)This AP writer prognosticates:
CONSUMER PROTECTION
House bill: A new agency would write rules to protect consumers from unfair credit cards, mortgages, payday loans and other products.
Senate bill: Would create a consumer financial bureau within the Federal Reserve. Its rules could be blocked by other regulators.
Impact: Some regulators were lax in their oversight before the crisis. Under the Senate plan, the regulators could overrule proposals intended to help consumers. Consumer advocates say the independent agency the House bill proposes would be tougher.
Prognosis: Uncertain. Rep. Barney Frank, the Massachusetts Democrat who will run the negotiations, favors an independent agency. So does the Obama administration. But industry opposition to the agency held up the Senate bill, forcing the compromise that would let other regulators overturn its rules.
That’s really sticking your neck out.
The tension builds
June 6, 2010 | federal legislation, industry | Comments (0)Not really, but the media likes to exaggerate things. From today’s New York Times:
“We’re on the verge of legislating sweeping reforms of our financial system, to fix what was broken in our system, recognizing that those failures in the United States were very consequential to the world as a whole,” Timothy F. Geithner, the Treasury secretary, said last week before leaving to meet with G-20 financial ministers in South Korea.
But first, Congressional negotiators must resolve substantial differences between the bills, which together total more than 3,000 pages and amount to the most extensive rewriting of financial regulations since the Great Depression. The process will begin formally on Thursday with a meeting of more than 20 lawmakers from both parties and both houses of Congress.
She’s baaaack
June 4, 2010 | federal legislation, industry | Comments (0)We have written about Elizabeth Warren for awhile because she was relatively quiet during the Senate debate on financial reform. Saturday’s Washington Post story on consumer group strategy for the conference committee includes this though:
“If we get a strong agency, the agency will make a real difference for families,” Warren said, “by making credit contracts comprehensible again, and by weeding out the tricks and traps that have distorted the true cost of credit and the risks associated with many credit products.”
Good, but payday loans are the most transparent financial service there is. Why should we be included in the legislation?
