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SteelCityMom
06-30-2010, 07:44 PM
House OKs sweeping bank rules; Senate vote awaits
By JIM KUHNHENN, Associated Press Writer – 25 mins ago

WASHINGTON – Nearly two years after a Wall Street meltdown left the economy reeling, the House on Wednesday passed a massive overhaul of financial regulations that would extend the government's reach from storefront thrifts to the executive suites of Manhattan.

Senate support for the far-reaching bill remained in flux, however. The Senate was forced to delay its vote to mid-July, denying President Barack Obama a victory before Independence Day. Democrats struggled to secure the votes of a handful of Republican senators even after meeting their demands and backing down on a $19 billion tax on big banks and hedge funds.

The legislation, swelling to more than 2,000 pages, would rewrite the nation's regulatory books. Simple supermarket purchases and exotic derivatives trades would be subject to new laws. And the entire financial system would be placed on a risk watch in hopes of thwarting the next threat of a financial crisis.

Obama hailed the vote as "a victory for every American who has been affected by the recklessness and irresponsibility that led to the loss of millions of jobs and trillions in wealth."

The 237-192 House tally broke largely along party lines but attracted more support than in December when no Republicans voted for the House version of the bill. The new legislation combines the House bill with one passed by the Senate last month.

"Today, I rise with a clear message that the party is over," House Speaker Nancy Pelosi declared. "No longer again will recklessness on Wall Street cause joblessness on Main Street. No longer will the risky behavior of the few threaten the financial stability of our families, our businesses and our economy as a whole."

Republicans portrayed the bill as a vast overreach of government power that would do little to prevent future bailouts of failing financial institutions. They complained that it failed to place tighter restrictions on Fannie Mae and Freddie Mac, the mortgage giants forced into huge federal bailouts after their questionable lending helped trigger the housing and economic meltdowns.

"This legislation is a clear attack on capital formation in America," said Rep. Eric Cantor of Virginia, the second-ranking House Republican. "It purports to prevent the next financial crisis, but it does so by vastly expanding the power of the same regulators who failed to stop the last one."

Only three Republicans voted for the bill: Joseph Cao of Louisiana, Mike Castle of Delaware and Walter Jones of North Carolina. Nineteen Democrats voted against it, eight fewer than in December.

As predictable as the House vote may have been, the Senate was a study in unpredictability.

House and Senate negotiators were forced to reconvene Tuesday to remove a $19 billion tax on large banks and hedge funds, hoping to overcome objections from Sens. Scott Brown, Susan Collins and Olympia Snowe, all Republicans who voted for the Senate version last month.

Democrats inserted the tax late last week as they assembled a combined House-Senate bill, catching big banks by surprise. Brown was the first to complain and threatened to vote against the bill if the tax remained in the final measure.

Desperate to hold at least 60 votes to beat back procedural hurdles, House Financial Services Committee Chairman Barney Frank, Senate Banking Committee Chairman Chris Dodd and Obama administration officials scrambled to drop the tax and devise another means of financing the bill's cost.

In the end, House and Senate negotiators, voting along party lines, agreed to pay for the bill with $11 billion generated by ending the unpopular Troubled Asset Relief Program — the $700 billion bank bailout created in the fall of 2008 at the height of the financial scare.

They also agreed to increase premium rates paid by commercial banks to the Federal Deposit Insurance Corp. to insure bank deposits. The increase would not affect banks with assets under $10 billion.

On Wednesday, Collins issued a statement saying she was now inclined to vote for the bill.

But Brown remained uncommitted, saying he needed Congress' weeklong July 4 recess to examine the details of the bill. He did credit Dodd for "thinking outside the box" in finding an alternative.

Earlier Wednesday, Obama had decried Republican opposition to the bill.

In remarks in Racine, Wis., the president took aim at House Republican leader John Boehner of Ohio for remarking in a newspaper interview that the financial regulation bill was like using a nuclear weapon on an ant.

"If the Republican leader is that out of touch with the struggles facing the American people, he should come here to Racine and ask people if they think the financial crisis was an ant," Obama said.

The American Bankers Association denounced the bill, and its president and CEO, Edward Yingling, vowed to continue to make the industry's case to the Senate.

"Many small banks are telling us they will simply have to sell out to larger institutions that have the staff to deal with the massive volume of new reports and rules," Yingling said in a statement.

The administration and House and Senate lawmakers have worked for more than a year to forge a bill. It has prompted a backlash from the financial industry and a populist cry from Congress to punish banks for the freewheeling practices that contributed to the 2008 meltdown.

Analysts by and large found the legislation tougher than what the Obama administration had recommended, but not as harsh as the industry had feared.

The legislation creates a new federal agency to police consumer lending, set up a warning system for financial risks, force failing firms to liquidate and map new rules for instruments that have been largely uncontrolled.

"This bill has the biggest package of increased consumer protections in the history of America," Frank said.

The legislation requires bank holding companies to spin off their derivatives business into self-funded subsidiaries. Banks would be allowed to keep less risky derivatives operations.

It sets new standards for what banks must keep in reserve to protect against losses, though lobbyists carved out a grandfather exception for banks with assets of less than $15 billion.

The legislation also adopted the Obama administration's so-called "Volcker Rule," named after its chief advocate, former Federal Reserve Chairman Paul Volcker. Commercial banks would not be permitted to trade in speculative investments. But negotiators agreed to let them invest in hedge funds and private equity funds, setting an investment limit of no more than 3 percent of their capital.

http://news.yahoo.com/s/ap/us_financial_overhaul

It's a slow start to putting a leash on the banks...but it's a start nonetheless.

X-Terminator
06-30-2010, 07:52 PM
More government in our lives. Yay for us! :coffee:

GitNoLuv
06-30-2010, 08:17 PM
Obama hailed the vote as "a victory for every American who has been affected by the recklessness and irresponsibility that led to the loss of millions of jobs and trillions in wealth."
Wasn't this "recklessness and irresponsibility" a lot of politicians fault (both sides of the fence?) Would we not have been better off with Gold as our standard income instead of the useless dollar bills that are (technically) worth less than the paper they're printed on?

7SteelGal43
06-30-2010, 10:34 PM
what about every American who has been raped by the IRS, and forced to pay added on fees and taxes because of dumbass mandates made to altar our behavior ? Now go get my cigarettes, bitch. LOL

attn mods: the term 'bitch' in this context was not aimed at any member of this board. Please don't ban me, bro !!:chuckle:

SteelCityMom
07-01-2010, 10:34 AM
Wasn't this "recklessness and irresponsibility" a lot of politicians fault (both sides of the fence?) Would we not have been better off with Gold as our standard income instead of the useless dollar bills that are (technically) worth less than the paper they're printed on?

Yes and absolutely yes.

And agree with you as well SteelGal. The IRS and the 13th amendment were the worst institutions and laws put into place in this country IMO. I hate them more than I hate the Patriot Act and the healthcare bill put together.

If we as a nation are to keep those routes (because let's face it...short of an American revolt, the IRS and the 13th amendment will never go away), then laws to protect citizens against shady actions of the banks is the next best thing.

Mach1
07-01-2010, 10:50 AM
Another law that needs to go is obaaamacare. Thats not going to attract any new business's.

stlrtruck
07-02-2010, 09:07 AM
So let me get this straight we have:

1) Corrupt politicians writing laws
2) New laws with guidelines to control the corrupt CEOS, etc, that heped get the corrupt politicians in office
3) New laws that will be impossible to regulate until well after another problem screws the "common folk"

Yeah, I'm excited!

BnG_Hevn
07-02-2010, 04:45 PM
If Obama and Pelosi give something accolades, I naturally oppose it because if they are for it then it is something that will ruin this country.

Godfather
07-02-2010, 07:39 PM
Yes and absolutely yes.

And agree with you as well SteelGal. The IRS and the 13th amendment were the worst institutions and laws put into place in this country IMO. I hate them more than I hate the Patriot Act and the healthcare bill put together.

If we as a nation are to keep those routes (because let's face it...short of an American revolt, the IRS and the 13th amendment will never go away), then laws to protect citizens against shady actions of the banks is the next best thing.

I think you mean the 16th...only Mel Gibson opposes the 13th :)

As far as this "reform" goes, banks are doing some things that shouldn't be legal. For example, some fly by night bank mailed me a check this week that was fully made out and just had to be cashed. By doing so I'd be agreeing to a 39.99% interest rate. I could get a better deal from the Mafia, but the worst part is if someone had taken that out of the mailbox and cashed it at a shady no-tell service I'd be screwed. THAT kind of crap needs to be illegal.

That said, we don't need a massive overhaul. Especially not one written by crooks like Frank and Dodd.