House Passes Financial Reform Bill
On December 11th, 2009 the U.
S.
House of Representatives passed legislation could rewrite the rules governing financial markets and dramatically curtail the power of the Federal Reserve.
If enacted, this proposed legislation would bring about the biggest changes to our financial system since the Great Depression.
The 1,279 page bill would create the Consumer Financial Protection Agency (CFPA) to oversee consumer protection initiatives.
This agency would be given the responsibility of monitoring many of the financial products available directly to consumers including most loans and credit cards.
The agency would also tackle consumer awareness, financial literacy education and credit card dispute arbitration.
However, due to amendments added to facilitate the bill's passage, financing from automobile dealers and credit-related insurance products would fall outside the CFPA's jurisdiction.
The proposed legislation will also set up a Financial Services Oversight Council to monitor large-scale financial risks, initiate regulation of the vast derivatives market and monitor institutions considered "too big to fail".
This council will be comprised of the Treasury Secretary, the Federal Reserve Chairman and heads of various financial regulatory agencies.
This group's primary responsibility will be to monitor the nation's financial markets for potential threats and to identify firms and activities where additional regulations should be adopted.
Most importantly, the bill also gives the council the power to dismantle large, troubled firms whose collapse could endanger the entire financial system.
Passing the U.
S.
House of Representatives by a vote of 223-202 with no Republican votes and 27 democrats opposed, the bill must overcome many hurdles before being signed into law.
Republican leaders argue that the regulations institutionalize bailouts and hinder business practices due to an overreaching of government powers and the weight of additional bureaucracy.
They also feel that the current legislation will not resolve many of the problems that led to the current financial crisis.
Before this new legislation can become a reality it will have to undergo rigorous scrutiny within the Senate.
In fact the Senate Banking Committee is now considering a bill that is considerably different than the House version and the Obama administration's original vision.
The bill would completely revamp the existing regulatory structure and create entirely new regulatory agencies with unprecedented powers.
If the Senate legislation should survive a final vote (expected in the first quarter of 2010), the two proposals would need to be reconciled, again creating the possibility for additions, cuts and a host of other last-minute wrangling.
It is likely that the final version of financial reform legislation will look very different from the current proposals.
S.
House of Representatives passed legislation could rewrite the rules governing financial markets and dramatically curtail the power of the Federal Reserve.
If enacted, this proposed legislation would bring about the biggest changes to our financial system since the Great Depression.
The 1,279 page bill would create the Consumer Financial Protection Agency (CFPA) to oversee consumer protection initiatives.
This agency would be given the responsibility of monitoring many of the financial products available directly to consumers including most loans and credit cards.
The agency would also tackle consumer awareness, financial literacy education and credit card dispute arbitration.
However, due to amendments added to facilitate the bill's passage, financing from automobile dealers and credit-related insurance products would fall outside the CFPA's jurisdiction.
The proposed legislation will also set up a Financial Services Oversight Council to monitor large-scale financial risks, initiate regulation of the vast derivatives market and monitor institutions considered "too big to fail".
This council will be comprised of the Treasury Secretary, the Federal Reserve Chairman and heads of various financial regulatory agencies.
This group's primary responsibility will be to monitor the nation's financial markets for potential threats and to identify firms and activities where additional regulations should be adopted.
Most importantly, the bill also gives the council the power to dismantle large, troubled firms whose collapse could endanger the entire financial system.
Passing the U.
S.
House of Representatives by a vote of 223-202 with no Republican votes and 27 democrats opposed, the bill must overcome many hurdles before being signed into law.
Republican leaders argue that the regulations institutionalize bailouts and hinder business practices due to an overreaching of government powers and the weight of additional bureaucracy.
They also feel that the current legislation will not resolve many of the problems that led to the current financial crisis.
Before this new legislation can become a reality it will have to undergo rigorous scrutiny within the Senate.
In fact the Senate Banking Committee is now considering a bill that is considerably different than the House version and the Obama administration's original vision.
The bill would completely revamp the existing regulatory structure and create entirely new regulatory agencies with unprecedented powers.
If the Senate legislation should survive a final vote (expected in the first quarter of 2010), the two proposals would need to be reconciled, again creating the possibility for additions, cuts and a host of other last-minute wrangling.
It is likely that the final version of financial reform legislation will look very different from the current proposals.
Source...