Is Consumer Protection Regulation ‘Too Big to Fail’?
Fascinating discussion:
“Thus an idea that the U.S. banking industry has learned to hate moved a giant step closer to reality. The creation of a consumer protection agency is part of the Obama administration’s plans to enact the most wide-ranging financial regulations since the Great Depression.
Following the 1999 decision to overturn the Glass-Steagall Act that separated commercial banks from securities firms, bank lobbyists have been able to shoot down virtually any proposed rule they perceived as unfavorable to their industry, lobbyists and politicians say . . .
Banks and securities firms spent $193 million to fund political campaigns for the 2008 elections and raise even more money through events that their trade groups organize. They have successfully fought the administration’s efforts to limit executive pay and are battling against draft legislation governing the $592 trillion market for derivatives.
When it comes to consumer banking, the industry’s lobbyists are no longer all-powerful. Banks lost their bid to squelch new credit card rules that Obama signed into law in May. They lobbied for months before a bill that would have forced them to renegotiate mortgages failed in the Senate.
Now the banks and their trade associations are lobbying furiously to kill Obama’s plan to create the new financial protection agency, which was approved by the House Financial Services Committee in late October and is likely to face a full House vote by the end of 2009.
Read the full piece . . .
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Source:
Banks Discover Consumer Protection Too Big to Fail
Yalman Onaran
Bloomberg, Nov. 3 2009
http://www.bloomberg.com/apps/news?pid=20601109&sid=a_iis3lSizIE&pos=10
November 4th, 2009 at 1:53 am
On this one, Banks AND Congress must bend over…or else!
After all, no politician wants to be booted out of office with the infamy of being the one who pissed on the consumer one time too many.
November 4th, 2009 at 6:43 am
I wish all those lobbyists and financial firm’s government affairs staff fighting consumer protection had to eat meat from plants that weren’t inspected, got Chinese dry wall, and end up with that odd bit of mercury in their system.
On a related note, the GOP doesn’t want to end pre-existing conditions in their “health care plan…”
http://primebuzz.kcstar.com/?q=node/20445
November 4th, 2009 at 7:52 am
This is what the bankers will lead us to:
http://www.tas.lv/img/uploaded/Image/EasterIsland02.jpg
November 4th, 2009 at 7:58 am
considering that banks are against it. and wall street is against it. and how well those two groups treat the rest of us. and what how they created this mess. thats at least 2 things in favor of this for any body!
November 4th, 2009 at 8:52 am
danm – love the Easter Island analogy and think it’s exactly right. You probably know that Diamond used it as one of his examples in “Collapse”? The point being that the chiefs on the island got into a power competition involving celebrating how big their “things” were (puns intended), didn’t have to go hungry, forced the denuding of the island and destroyed the ecology. When an elite sacrifices the long-term welfare of their social ecology for their own immediate gratification you have a recipe for socionomic collapse. Which is Diamond’s central finding.
The Finance Industry has put financial engineering and loading up everybody with debt and the resultant profits and bonuses ahead of the welfare of society. The correctives on the table wouldn’t be as good as socially responsible self-governance but are sure better than social collapse, which is what we almost had. And the last two quarters where bank profits are entirely based on trading profits using our money pretty prove the case that scorpions don’t change their nature, even if they’re going to drown.
For the backup business case behind that assessment you might want to take a look at this:
http://llinlithgow.com/PtW/2009/10/the_chinese_goldsmith_finance.html or this:
http://llinlithgow.com/PtW/2009/10/banks_hate_banks_voters_hate_b.html
November 4th, 2009 at 10:05 am
The government can do no good crowd is also against this. The ditto heads are being told that this is an assault on them, that they will suffer as those lower on the economic totem pole benefit. The line of thought is that they will have less credit etc. and be losers if this passes. Of course this is the same line of thought that says it was the government, though legislation, that forced the banksters to lend money to the same people. Amazing what one ‘learns’ from the radio.
November 4th, 2009 at 10:34 am
“When it comes to consumer banking, the industry’s lobbyists are no longer all-powerful. Banks lost their bid to squelch new credit card rules that Obama signed into law in May.”
Oh please lets get real here. GS made money on every trade last q except 1 day. GS has been selling a “product” to customers while knowing that it was a defective product that was going to blow up in the near future.
Now on the first point it is next to impossible to get that kind of success without gaming the system. A government that is not own by these firms would be investigating them – Do you see any AG doing that?
On the second point the equivalent would be a pharmaceutical company selling a drug knowing that it has a %100 chance of destroying a patients liver because they also sell livers on the side. This is enough to land the execs. at that company in jail. Do you see that happening in any of the big financial firms?
So to summarize they can pass as many laws and regulations as they want because they will not be enforced just like the old ones were not enforced.
November 4th, 2009 at 11:50 am
Banks are or have fought against: “efforts to limit executive pay, legislation governing the $592 trillion market for derivatives, new credit card rules and to renegotiate mortgages”.
This is the thanks we taxpayers get for rescuing them (and us supposedly) from the end. We cover their backs while they continually work to exploit our backsides. I wished they would have just allowed them to blow up in the beginning like the majority of the population wanted.
November 4th, 2009 at 1:26 pm
noone sees the– Problem.. Reaction.. Solution gambit at play, here, as well?
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Problem+Reaction+Solution
The Problem Reaction Solution Paradigm (The Hegelian Dialectic)
1) The government creates or exploits a problem blaming it on others
2) The people react by asking the government for help willing to give up their rights
3) The government offers the solution that was planned long before the crisis
November 4th, 2009 at 2:46 pm
For an industry, the only thing better than no regulation is regulation that industry controls.
Expect Wall St. to oppose all regulation change, then abruptly concede “defeat” with the passage of regulation that ultimately will allow Wall St. to control the regulators.
Nothing new, just the sadness of watching our democracy wither.
Is a spine transplant for Obama covered under the proposed health care plan?
November 4th, 2009 at 6:29 pm
Banks resisting making what is already unethical to the point of immorality, illegal (they don’t mind being despised as the vampire squid/leech/pariahs they are, but they don’t want anything to happen that might make them suffer actual consequences).
OTOH, we’d be doing much better right now if the government would simply enforce the laws already on the books.
November 4th, 2009 at 8:05 pm
dblwyo:
Look at what is currently happening on the islands… Iceland, Japan, Australia (drought)… I think they will give us a clue of what to expect within the next decade.
The ROW is the Western world’s dump but with globalization, the earth is an island.
November 4th, 2009 at 8:44 pm
And how could I miss Ireland!