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Wondering what Dr Paul thinks of this new bill introduced by his good buddies.
Senate Dems move to curb Fed's powers
Senate Dems move to curb Fed's powers
By ANNE FLAHERTY (AP) – 4 hours ago
WASHINGTON — Senate Democrats on Tuesday proposed stripping the Federal Reserve of its supervisory powers and creating instead three new federal agencies to police banks, protect consumers and dismantle failing institutions.
The 1,136-page bill, released by Senate Banking Committee Chairman Chris Dodd, would represent a significant shift in power in federal oversight of the U.S. market. The Fed has been a dominant figure in managing the economy, although many lawmakers blame the central bank for not doing enough to prevent last year's crisis.
"We saw over the last number of years when (the Fed) took on consumer protection responsibilities and the regulation of bank holding companies, it was an abysmal failure," said Dodd, a Connecticut Democrat.
Dodd's proposal prompted cheers from consumer advocates and other Democrats, including Sen. Mark Warner, D-Va., an influential moderate who said swift action was necessary to prevent future government bailouts of big banks.
"Never again should the American taxpayers have to hear about 'too big to fail,' where the American taxpayer has to pick up the slack," Warner said.
But the financial industry quickly pushed back.
The bill "would produce conflicts among regulators, undermine the state-chartered banking system and impose extensive new regulatory burdens on those banks that had nothing to do with creating the financial crisis," said Edward Yingling, president of the American Bankers Association.
While Republicans were expected to oppose much of the bill, Sen. Bob Corker, a Tennessee Republican on Dodd's committee, issued a statement setting an optimistic tone.
"I'm more hopeful than I was a few weeks ago that we will be able to come up with a bipartisan bill," said Corker, who has worked closely with Warner on banking issues.
Among the top points of contention: Dodd's desire to create a Consumer Financial Protection Agency to protect consumers taking out home loans or using credit cards against predatory lending and surprise interest rate hikes.
Republicans and industry officials say that creating another bureaucracy will make it harder for banks to do business and would limit the availability of credit.
Other provisions in Dodd's bill would:
_ Consolidate federal supervision of banks under a "Financial Institutions Regulatory Administration."
_ Abolish the Office of the Comptroller of the Currency and the Office of Thrift Supervision, and strip the Federal Deposit Insurance Corporation and the Fed of their bank supervision duties.
_ Create an "Agency for Financial Stability" that would enforce new rules and dismantle complex financial firms if they threaten the broader economy.
_ Regulate privately traded derivatives, hedge funds and other private pools of capital so that regulators have a sense of how much risk is being assumed by financial firms.
_ Impose new rules on investment rating agencies.
_ Limit the Fed's ability to provide emergency loans to mostly healthy institutions, instead of failing firms.
The Senate Banking Committee was expected to take up the legislation next week and vote by early December. Dodd said he expects to need Republican support to get the bill through Congress and that he remains optimistic consensus could be reached.
The bill will also have to be reconciled with the House version. Rep. Barney Frank, chairman of the House Financial Services Committee, said he expects a floor vote in December on his proposal.
Like Dodd, Frank wants to strip the Fed of its consumer protection powers and create a separate agency dedicated to the mission. Both House and Senate bills also would limit the Fed's ability to provide emergency loans and create a council of regulators to monitor the risks posed by large financial firms.
But the House bill wouldn't consolidate federal banking supervision and would ultimately put the Fed in charge of enforcing new requirements for large and influential firms.
Frank said Dodd's announcement on Tuesday confirmed that "we are moving in the same direction" and will enact legislation soon.
Senate Dems move to curb Fed's powers
Senate Dems move to curb Fed's powers
By ANNE FLAHERTY (AP) – 4 hours ago
WASHINGTON — Senate Democrats on Tuesday proposed stripping the Federal Reserve of its supervisory powers and creating instead three new federal agencies to police banks, protect consumers and dismantle failing institutions.
The 1,136-page bill, released by Senate Banking Committee Chairman Chris Dodd, would represent a significant shift in power in federal oversight of the U.S. market. The Fed has been a dominant figure in managing the economy, although many lawmakers blame the central bank for not doing enough to prevent last year's crisis.
"We saw over the last number of years when (the Fed) took on consumer protection responsibilities and the regulation of bank holding companies, it was an abysmal failure," said Dodd, a Connecticut Democrat.
Dodd's proposal prompted cheers from consumer advocates and other Democrats, including Sen. Mark Warner, D-Va., an influential moderate who said swift action was necessary to prevent future government bailouts of big banks.
"Never again should the American taxpayers have to hear about 'too big to fail,' where the American taxpayer has to pick up the slack," Warner said.
But the financial industry quickly pushed back.
The bill "would produce conflicts among regulators, undermine the state-chartered banking system and impose extensive new regulatory burdens on those banks that had nothing to do with creating the financial crisis," said Edward Yingling, president of the American Bankers Association.
While Republicans were expected to oppose much of the bill, Sen. Bob Corker, a Tennessee Republican on Dodd's committee, issued a statement setting an optimistic tone.
"I'm more hopeful than I was a few weeks ago that we will be able to come up with a bipartisan bill," said Corker, who has worked closely with Warner on banking issues.
Among the top points of contention: Dodd's desire to create a Consumer Financial Protection Agency to protect consumers taking out home loans or using credit cards against predatory lending and surprise interest rate hikes.
Republicans and industry officials say that creating another bureaucracy will make it harder for banks to do business and would limit the availability of credit.
Other provisions in Dodd's bill would:
_ Consolidate federal supervision of banks under a "Financial Institutions Regulatory Administration."
_ Abolish the Office of the Comptroller of the Currency and the Office of Thrift Supervision, and strip the Federal Deposit Insurance Corporation and the Fed of their bank supervision duties.
_ Create an "Agency for Financial Stability" that would enforce new rules and dismantle complex financial firms if they threaten the broader economy.
_ Regulate privately traded derivatives, hedge funds and other private pools of capital so that regulators have a sense of how much risk is being assumed by financial firms.
_ Impose new rules on investment rating agencies.
_ Limit the Fed's ability to provide emergency loans to mostly healthy institutions, instead of failing firms.
The Senate Banking Committee was expected to take up the legislation next week and vote by early December. Dodd said he expects to need Republican support to get the bill through Congress and that he remains optimistic consensus could be reached.
The bill will also have to be reconciled with the House version. Rep. Barney Frank, chairman of the House Financial Services Committee, said he expects a floor vote in December on his proposal.
Like Dodd, Frank wants to strip the Fed of its consumer protection powers and create a separate agency dedicated to the mission. Both House and Senate bills also would limit the Fed's ability to provide emergency loans and create a council of regulators to monitor the risks posed by large financial firms.
But the House bill wouldn't consolidate federal banking supervision and would ultimately put the Fed in charge of enforcing new requirements for large and influential firms.
Frank said Dodd's announcement on Tuesday confirmed that "we are moving in the same direction" and will enact legislation soon.
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