Financial consumers would have fewer protections than originally envisioned under a draft of a bill being circulated on Capitol Hill.
The latest proposal for a Consumer Financial Protection Agency would no longer require financial institutions to offer a “plain vanilla” version of its products, such as a basic 30-year fixed rate mortgage. That would free lenders to concentrate on selling more sophisticated and expensive products.
The changes were proposed in a memo sent to Democratic members of the House Financial Services Committee on Tuesday evening by its chairman, Barney Frank.
The financial crisis sparked the idea for the agency, to make financial products safer for consumers. Advocates say such an agency could have prevented the subprime mortgage crisis and the resulting financial meltdown.
The agency would be able to examine and subpoena information from banks, while regulating financial tools such as mortgages and credit cards. Such an agency could determine the language on loan applications, how it’s presented and what the disclosure requirements are.
The new proposal would exempt non-bank businesses — such as merchants and retailers — from oversight. That means they could continue to offer customers tabs and layaway plans without facing a new layer of regulation, Frank’s memo said. Accountants, real estate brokers and agents also would be exempt.
Oddly enough, the banks are less than thrilled with the idea of this agency and would rather kill it outright.
Other countries banking systems haven’t been bollocked. Why doesn’t the US just do what they do? Regular peer reviews of your regulatory processes to improve and streamline them. Leaner and more effective governance (that’s a grown up word) which are effective far modern banking systems is what you need.
Oh course, that would mean congress would have to act like grownups. And left wingers would need to calm down about leane and effectives regulations. And right wingers would have to calm down about constructive and helpful criticism from non-Americans. Nah, it won’t work.
Sorry about the finger dyslexia in #80.
QB==all that foreigner phobia can be avoided. We just need to re-authorize all the regs that were removed over the past 10 years==mostly to the point of avoiding too big to fail and thinking free market can regulate taking on excessive risk. INSTEAD, congress seems to be only looking at how to make excessively large institutions “safer” for the public. THEY SHOULD BE OUTLAWED!!!!
Regulators who fail to regulate should be fired. Criminals who steal money and who weren’t caught by regulators should go to jail. Once you serve in government==you CANNOT BE A LOBBYIST.
Gee, we should even consider voting all incumbents out of office until the publicly corrupt politicians learn they need to offer some cover to themselves by passing some effective legislation.
The atmosphere is so polluted, you have Blagojevitch being mocked only with stunned humor rather than actual disgust.
We are, even now, continuing to do it to ourselves. No magic. No mystery. Corruption allowed by appeals to the stupidity of the voting public.
Mr Thoughtful Bobbo,
My thinking is that is a step backward. The world has changed a lot in the last 10 years, mortgage brokers invest, investment brokers mortgage, there is over the counter trading between countries, and hedge funds invest more in foreign intelligence than the US government.
A modern governance framework needs to be modern and evolve. I know what you’re saying: sanity needs to be put back into the system. I agree. But the framework needs to be more evolutionary and adaptive and I don’t think 10-15 year rewind will do that.
qb–you claim I am being atavistic?
Well, lets take your point as stated: if we go back to a system that would not allow these “modern” arrangements you assume are good, wouldn’t we still have to weigh and balance the good and bad of each regulatory approach and determine which one nets out better?
Seems to me you want “modern” but I see modern as nothing but corruption. Modern Corruption vs Antediluvian Virtue? I choose virtue and think corruption outweighs the value of modernity.
What has gotten us into trouble is nothing modern, nothing valuable, nothing that builds and supports real growth, stability or anthing else of value. These modern arrangements constitute a modern looting of commerical trade, a parasitic skimming of productivity, an interlopers predatory poaching under the sheepskin of market capitalism and free enterprise.
No qb==appeals to philosophy are disingenuous.
BE SPECIFIC: should banks be allowed to sell credit swaps on a 40 to 1 leveraging of capital, or should we ((as was the law before 1998)) be limited to 10 to 1?
Should any financial entity be allowed to provide 80% of the services to that market or should it be broken up via anti-trust rules to provide more competition, to avoid “too large to fail?”
Don’t let adherence to dogma cloud your vision, nor appeal to emotional terms stop it all together.
The oldies are goldies==proof over 80 years time they work. Your modern is also a proven failure in just 15 years.
Do you value risk taking and wealth transfer to the already risk for nonproductive behavior, or do you value stability and steady return to the common investor?
Correcting last para of #85: “Do you value risk taking and wealth transfer to the already risk ((SHOULD BE RICH not risk)) for nonproductive behavior, or do you value stability and steady return to the common investor?
I notice my fingers typing something other than what I am thinking to say. Muscle Memory as “risk” was typed only a few words before? Or some kind of early onset Alzheimer’s dumb typo syndrome? Disturbs me as it puts a burden on everyone else. Most errors/dyslexia can be understood in context and don’t need an extra post. Others make no sense at all. The fact that I make BOTH is little comfort.
81, BECAUSE we would piss off the bankers.
83, 10 years??? lets go back to Resgan, or even NIXON.. Nixon deregulated ALl the utility companies.
Tax always goes UP and never goes down..
This is why Gays shouldn’t hold public office. They’re too will to bend over to guys who are big pricks. In this case, the banking execs.
bobbo, my pramatic friend said “qb–you claim I am being atavistic?”
I would never claim that. I may disagree with you, even poke fun at you, but I would never imply that you were backwards or revisionist. If you took it that way, then I apologize.
There 2 thoughts to many ideas..
Who do you want protecting your money? Someone WHO knows the system and someone thats TRYING to protect his OWN money. And if the idiot makes MORE money then GOD, does he care?
The same thought goes with POLITICS. But in a different manor. You need a good debater(not a master debater), as well as someone who knows your STATE. someone who KNOWS whats happening. a person thats Very knowledgable..
The problem is..those that KNOW the job dont want it. So we must be ruled by those with LESS knowledge, that WANT the job.
To the point, you want someone SMART that does not WANT the job..
Didnt we elect persons to be RESPONSIBLE??
dont corps hire someone to be RESPONSBILE??
What recourse can we do/do we have..
What would a company/corp do to someone who @#$$@% up BAD??
And its NOT fire them..thats the beginning of what would happen.
#79 bobbo,
“It would be amusing to look “behind” what you are saying and see what you mean?”
You’ll have to forgive me, this is a huge question and there’s no way I have time to address it right now. I agree though, it would be amusing, probably more so for me than anyone.
“Just what do you think the job of an insurance company is?”
To protect against risk you can’t, or aren’t willing to accept. This is not how health insurance works, health insurance is essentially nothing more that a third payer system and thats one of the main reasons health care costs so damn much.
I buy catastrophic health insurance, but I’m not allowed to get a long term plan and I can’t get it pretax like employer provided insurance, no matter what I do or ask for the plan MUST, WITHOUT EXCEPTION, cover XYZ, B, G, and Q. I can’t buy it from another state.
Those are merely the most obvious restrictions and regulations, there are many more.
I buy catastrophic insurance so that if I get into a serious accident or get seriously ill then I’ll be covered and wont have to pay some extraordinary amount. I pay the rest out of pocket, because most of the rest is in my control and is affordable. Things like, routine checkups, antibiotics, minor cuts that would require stitches, etc…
If everyone had a plan like this health care costs would drop dramatically, but most people wont, because they can get health care from the government for free, or through their employer pretax, and only certain types of plans are allowed through an employer.
“I understand though.”
Don’t be silly.
“I could be A GREAT SURGEON, hack-whack, I enjoy the look, taste, feel of blood. I enjoy it so much, I’d do it for free.”
Awesome, when can I schedule an appointment?
“All we need now is some kind of gatekeeper to tell me what to cut out and some kind of after care guy to check for infection”
Awesome, I got several people for the job! Almost any university, or maybe a respected certification! Whatdya got?!
Interesting, you got your degree from “I am a great surgeon….HONESTLY!! University!”
The good old IAAG…H!!U! Must be a pretty prestigious university since they hired you at this hospital. They must have done extensive background checks and several interviews and also had an internship period before they decided you were capable of doing open heart surgery and you seriously do it for free? How can you afford that? You truly are a charitable and generous man.
1 day later…I die on the operating table.
My hysterical wife sues the hospital and you, because evidently you didn’t know anything about surgery and the assisting nurses confirm this. Although, by some miracle you were able to pull the wool over the eyes of the hospital hiring manager. It’s a horrible tragedy and the immediate fallout is HUGE…
-The hiring manager loses his job.
-Consumer advocate groups (magazines, medical websites etc…) light up with this story…
-the blogosphere erupts with anger…
-You lose your job, you have a lawsuit filed against you and you could lose everything you have or worse.
-The hospital apologizes profusely, although their reputation is severely damaged. They have costly legal troubles as well.
-Local news goes nuts
-Fellow doctors at the hospital distance themselves, possibly excepting different positions at other medical institutions.
-etc…
-etc……..
-etc…………..
Ask yourself, what would happen if? Think through it, what would actually happen? The market has a ridiculously complex web that regulates itself. I really don’t see how a private institution could significantly harm the consumer.
Sure, people are fallible, mistakes happens, and people get hurt. It happens, you can never completely eliminate this factor. You can only reduce it and you can only reduce it so much.
“and we are in business. Pesky government regulations interfere with those wanting to play doctor. Consider your own experiences==can’t any of us cut a piece of meat? Surgery==biggest quack regulations in the world.”
I can cut a piece of meat, would you like me to do surgery on you? Sounds like a lot of fun? I promise I won’t kill you. I’m a surgeon. I know what the heart does! It pumps blood! I’m more than qualified!
Your objections are silly…
I’d still like to hear a response from our libertarian friends on my points in 58,67, and 70. I’m calling you twisted. Are you just going to take it?
#93 Phydeau,
I’ve already addressed your points in different ways. If you can’t extrapolate my points to apply to your accusations and questions then there is no hope for you. You’re like a broken record, you haven’t brought any new substance to the discussion since your 3rd post.
Try answering your own questions, really try. Seriously. If you really can’t figure out how the market would handle a problem then ask me, I can and will give you an answer.
Apparently, we are all toooo clever to discuss this issue.
DA==”The Issue” is the role of regulation with you initially taking the position that regulation is not needed that the consumer acting in a free market was competent to protect himself.
Then you were given multiple examples of just how wrong this is.
You counter by showing how parts of the regulatory scheme that you don’t support would take action.
Courts of Law are nothing but a most important part of the regulatory scheme==you sue based on regulatory laws==not free market dogma.
Seems to me you highlight a massive FAIL on your part.
Discussion of free market is WITHOUT EXCEPTION for idiots. THE ONLY rational discussion POSSIBLE is about what regulations should be applied.
You might respond “except for protecting against fraud” free market principles apply. Regulatiing fraud can rhetorically be linked to just about anything else making your exception 99.9% of what regulation is. But lets be generous and conservative. Fraud still takes up 80% of the regulatory issue.
When you find an instance of bad regulation that is argument NOT for free market, but rather for intelligent regulation.
This applies to health insurance as well.
#94 for the record, not that anyone’s reading this thread any more, no, you didn’t answer my question. It’s a yes/no question. Would you rather have people die in unsafe cars, eating unsafe food, taking unsafe drugs for a while until the people catch on that they’re unsafe, then try to sue huge corporations with fancy lawyers using up their meager savings, if any?
Yes or no.