"House passed the most ambitious restructuring of federal financial regulations since the New Deal "

[ProSense]

Major makeover of Wall Street regs passes House

By JIM KUHNHENN, Associated Press Writer

WASHINGTON – The House passed the most ambitious restructuring of federal financial regulations since the New Deal on Friday, aiming to head off any replay of last year's Wall Street failures that plunged the nation deep into recession.

The sprawling legislation would give the government new powers to break up companies that threaten the economy, create a new agency to oversee consumer banking transactions and shine a light into shadow financial markets that have escaped the oversight of regulators.

The vote was a party-line 223-202. No Republicans voted for the bill; 27 Democrats voted against it.

While a victory for the administration, the legislation dilutes some of President Barack Obama's recommendations, carving out exceptions to some of its toughest provisions. The burden now shifts to the Senate, which is not expected to act on its version of a regulatory overhaul until early next year.

The president praised the House action Friday, and called on Congress to act swiftly to get the bill to the White House for his signature.

more

Updated to add PDFs:

The Wall Street Reform and Consumer Protection Act (Summary)

HIGHLIGHTS OF H.R. 4173, THE WALL STREET REFORM AND CONSUMER PROTECTION ACT

[MadMaddie]

1. And now to the Senate where obstructionist Joe Lieberwhore

and Repugs will try to stall or destroy the bill. Harry Reid will negotiate any fire the bill has away.......and so on....

[CK_John]

2. Look tough, but not being tough. A show for the rubes. The Senate will never even read the bill let

alone pass any backing bill.

[Cha]

3. Thanks, PS..Wonder why the "27 dems"

didn't like it?

[DURHAM D]

4. Dennis K has an explanation on his website. nt

[ProSense]

7. Right, the bill wasn't perfect

“Although I am supportive of the Consumer Financial Protection Agency as well as other provisions in the bill, ultimately I do not think this bill adequately addresses the causes of the financial crisis, and I do not believe the reforms are sufficient to prevent another financial crisis from occurring.

<...>

“HR 4173 cannot be the end of this process but I fear passage of this bill will preclude further consideration of financial reform. If Congress rests on the laurels of HR 4173, we will be back here sooner rather than later to debate the same issues all over again. I look forward to continuing efforts to enact real, comprehensive reform of the financial services industry.”

Good grief.

[DURHAM D]

9. Yep - its just lipstick on a pig. nt

[ProSense]

10. BS. n/t

[DURHAM D]

11. so predictable...

[high density]

28. Dennis voted with the Republicans again?

What a surprise. He talks a lot about a perfect world that he envisions, but if the nation depended on him for some forward movement here, it seems he's as useless as the Nopublicans.

[Cha]

29. Dennis voted with the republcons not to

reprimand joe wilson, too..said it was a waste of time..but, there he was.

[boppers]

41. Dennis is a sanctimonious, self promoting, pseudo-contrarian?

When did that happen?

:rofl:

[girl gone mad]

5. Trascript of Marcy Kaptur's speech in opposition to this ersatz reform:

http://www.kaptur.house.gov/index.php?option=com_content&task=view&id=517&Itemid=99999999
December 10, 2009: America Needs a Real Wall Street Reform Bill

Below is a transcript of the speech that Congresswoman Marcy Kaptur gave on the House floor opposing H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009.

Madam Speaker, maybe someday real banking reform will be considered by this Congress.

Real reform means breaking up the big banks. Real reform means empowering community banks and local capital accumulation. Real reform means separating speculation and investment. Real reform means restoring prudent lending. Real reform means restructuring troubled housing mortgages. Real reform means rewarding institutions that play by the rules and don't over-leverage. Real reform means prosecuting financial white-collar criminals and keeping them out of finance permanently.

Real reform means directly connecting executive pay and bonuses to the performance of the company and recouping the $145 billion in unwarranted bonuses for the American taxpayer. Real reform means regulating all derivatives openly and clearly. Real reform means limiting interconnectedness between large financial institutions. Real reform means independent supervisory and regulatory agencies that do their job--independent supervisory and regulatory agencies.

The bill that will be considered tomorrow, as it was today, merely bunts at wrestling casino capitalism to the ground. This bill, like so many before it, will simply lead to more abuse, more risky behavior, and more reward for the most hazardous and imprudent characters.

Wall Street needs our help in rescuing them from their own bad behavior, not because Wall Street deserves it or is worthy; they need to be disciplined because our natural interest is more important than Wall Street.

Let's dissect America's economic predicament and what Congress has passed to fix it. In the fall of 2008, Congress passed the "Wall Street bailout." It told America that the TARP would work to steady the housing market. It not only didn't steady the housing market, but its purpose was totally changed by Secretary of Treasury Paulson, who gave the money to the biggest banks in our country whose risky behavior caused the meltdown. And Congress, it just looked the other way.

Now the housing foreclosure crisis has worsened coast to coast; 2 million Americans have lost their homes, and another 6 to 12 million are projected to lose their homes. Meanwhile, the biggest perpetrators of this disaster--the Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Goldman Sachs--have gone from controlling 30 percent of all deposits in this country when this mess began to 40 percent now.

The big 5 are just eating us up and taking bigger bonuses too. It is estimated they will reward themselves with that $145 billion in bonuses this year. Credit remains frozen across our country until today, seizing up economic recovery, and this bill calls itself the "Wall Street Reform Bill."

This bill, like those before it, will not meet the serious challenges crippling our financial system and it surely will not give a good signal to the future. Congress said the TARP bailout would save us from depression, but TARP passed, and the American people went into depression. Only the big banks were saved.

The bills passed by Congress today protect Wall Street and their shareholders. Main Street pays the price. Is this bill a reform bill? No. It will not break up the big banks. It will not create a strong, independent financial institution regulatory agency. It will not separate speculation from investment activity. It will not require loan workouts to stem rising foreclosures. It will not recoup undeserved Wall Street bonuses to help pay for this economic mess and put America back to work. In fact, the bill merely asks for nonbinding votes of shareholders.

It will not rein in nonbanking firms, but instead provide them with a golden sandbox. It will not rein in the power of the Federal Reserve. It will not regulate all over-the-counter derivatives. It will not provide the requisite number of FBI agents and prosecutors to put behind bars the financial world's white-collar criminals whose fraudulent behavior caused this mess. It will not bring to justice the wrongdoers at Fannie Mae and Freddie Mac. There are bills in this House to do that; they're not included in this bill.

And it places the Treasury Department, a politically appointed superstructure, so much a part of the problem, in charge of the Finance Services Oversight Council. Importantly, it fails to institute and strengthen independent financial regulatory and supervisory agencies. The political appointees on this oversight council are surely clapping in the wings. This bill gives more power to the opaque Federal Reserve.

You know, you would think that after all the damage that has been done in the Republic, this Congress would have the guts for real reform. This bill isn't it, and I urge my colleagues to vote "no" on final passage.

[ProSense]

8. Marcy Kupter who voted for the Stupak amendment?

Why the hell should anyone care why she voted against financial reform?

[girl gone mad]

12. Yes, "pro-life" Marcy Kaptur. She is consistent in her beliefs.

I do not agree with her stance on choice, but she has been 100% right about financial reform. She is a true liberal populist on economic issues and I strongly support and admire her intelligence and honesty.

How ignorant to dismiss someone's work out of hand simply because you disagree with their point of view on a completely unrelated topic. Then again, I've learned to expect this type of childish, irrational reaction from you.

[ProSense]

14. She's talking nonsense.

Her logic is flawed.

[girl gone mad]

20. Care to back up that statement?

I spent the better part of this afternoon reading through the bill and I agree with every word of Kaptur's speech. This reform is deeply flawed. There are far too many http://baselinescenario.com/2009/12/09/how-to-kill-otc-derivatives-reform-in-two-sentences/">loopholes in the derivatives regulation. Melissa Bean pushed through her http://blog.littlesis.org/2009/12/10/melissa-beans-backers-are-key-obama-associates/">corporate lobbyist bullshit, which completely defanged the CFPA. Too big to fails are http://www.economicpolicyjournal.com/2009/12/morphing-of-financial-reform-bill-into.html">reinforced through fed protections and access to the discount window, rather than broken up. Cramdowns were http://www.reuters.com/article/idUSTRE5BA3CN20091211">defeated, FDIC-imposed haircuts on secured creditors of failing firms were http://www.onwallstreet.com/news/change-financial-reg-reform-2664958-1.html">cut in half. I honestly believe that this is worse than no reform, in large part because the biggest banks have been http://www.huffingtonpost.com/2009/12/11/house-democrat-ed-permlut_n_387064.html">exempted from supervision by the CFPA. This is not real reform and it will do nothing to remedy Crony Casino Capitalism.

[ProSense]

22. "I honestly believe that this is worse than no reform"

Then your logic is flawed.

[girl gone mad]

23. I backed up my statement with FACTS.

You have nothing but empty retorts.

[ProSense]

24. Facts?

There is a bill packed with reform (see the PDFs, statements by the CBC, Waters, Grayson and even Kucinich's lame excuse). You point out a couple of things that it doesn't include, and them make the ludicrous claim that the status quo would be better (flawed logic).

[girl gone mad]

25. Yes, FACTS.

I posted facts about the bill, backed up by links. It's clear that you didn't read my post, because it wasn't about things not included in the bill. It was about amendments that weakened the consumer protection agency, loopholes written into the bill to limit oversight of derivatives, special powers granted to allow the Fed to end-run congress, and last minute changes on behalf of the lobbyists, all of which add up to severely diminish the impact of this so-called reform.

Care to dispute any of them?

Breaking up the big banks and regulating derivatives aren't just "a couple of things that it doesn't include". These are the issues at the very heart of this crisis and the fact that you would choose to characterize congress's failure to adequately address these problems in such a cavalier manner tells me that you either don't understand what's at stake here or you simply don't care.

[ProSense]

26. No, these are your opinions

It was about amendments that weakened the consumer protection agency, loopholes written into the bill to limit oversight of derivatives, special powers granted to allow the Fed to end-run congress, and last minute changes on behalf of the lobbyists, all of which add up to severely diminish the impact of this so-called reform.

Weakened? You are pushing your interpretation of the bills as facts. The fact is that no consumer protection agency currently exists, derivatives are unregulated and the other significant reforms are much needed.

The all-or-nothing, perfect-or-status quo stance is silly and unrealistic.

[girl gone mad]

30. No, dear, these are not opinions.

It is a fact that the bill is full of loopholes which make the derivatives reform meaningless.

It is a fact that Melissa Bean's amendment significantly weakened the protection agency.

It is a fact that the FDIC creditor haircuts were halved at the last minute.

It is a fact that the too big to fails will not be broken up as a result of this bill.

It is a fact that the Fed was given more powers to bailout large financial institutions.

This has nothing to do with all vs. nothing, or perfect vs. status quo.

I don't want all and I don't want perfect. All I want is for the problems at the heart of this crisis to be addressed. This reform does not do that.

Hyping this hollow bill as if it is the "toughest reform in 80 years" is nonsense fluff which gets us nowhere. Instead of premature celebration, we should be pushing the Senate to actually strengthen this legislation into something meaningful. We can do that in part by exposing what's wrong with the House Bill.

[ProSense]

32. No, those are opinions.

Like all the BS opinions about how weak the public option is, and now that it's likely gone, the bill is still the worse thing ever.

The problem with your so-called "facts" is that they are speculative or state something that was never intended to be part of the bill:


You: It is a fact that the bill is full of loopholes which make the derivatives reform meaningless.

Facts: Regulation of Derivatives: Regulates, for the first time ever, the over-the-counter
(OTC) derivatives marketplace. Under the bill, all standardized swap transactions
between dealers and “major swap participants” would have to be cleared and traded
on an exchange or electronic platform. The bill defines a major swap participant as
anyone that maintains a substantial net position in swaps, exclusive of hedging for
commercial risk, or whose positions create such significant exposure to others that it
requires monitoring.


You: It is a fact that the too big to fails will not be broken up as a result of this bill.

Facts: Dissolution Authority and Ending “Too Big to Fail”: Establishes an orderly
process for dismantling large, failing financial institutions like AIG or Lehman
Brothers in a way that ends bailouts, protects taxpayers, and prevents contagion to the
rest of the financial system.

ENDS TAXPAYER BAILOUTS AND “TOO BIG TO FAIL”
•
H.R. 4173 will once and for all put end to “too big to fail” financial firms and ensure that taxpayers are never again left on the hook for Wall Street’s reckless decisions.
•
The bill creates an inter-agency oversight council that will identify financial companies that are so large, interconnected, or risky that their collapse would put the entire economy at risk. These systemically risky firms will be subject to heightened oversight, standards, and regulation.
•
The bill establishes an orderly process for shutting down large, failing financial firms like AIG or Lehman Brothers in a way that ends taxpayer-funded bailouts and minimizes the impact on the financial system.
•
If a large institution collapses, the bill holds Wall Street - not taxpayers - accountable. Any costs associated with dismantling a failed firm will be paid first from the company’s assets at the expense of shareholders and creditors. Any additional costs will then be covered by a “dissolution fund” pre-funded by large financial companies.



edited word.

[girl gone mad]

33. You are quoting from a fluff Press Release about the bill.

It does not end taxpayer bailouts and it does not end too big to fail.

As I told you previously, big banks are exempt from the protection agency, thanks to an amendment by Perlmutter and Frank. And that, right there, is what's known as a http://www.huffingtonpost.com/2009/12/11/house-democrat-ed-permlut_n_387064.html">fact.

Your fluffy press release does not negate any of the other facts I posted, either.

[ProSense]

34. A fluff press release? What the hell are you talking about?

The legislation and its summary aren't spin.

[girl gone mad]

35. The text you quoted is from the...

http://www.house.gov/apps/list/press/financialsvcs_dem/presscfpa_121109.shtml">Financial Services Committee press release.

The links I posted included actual text from the bill and its amendments, analysis from professional ecconomists, as well as reporting from the House floor Thursday night when Frank engaged in colloquy to get the Perlmutter loophole through. You know.. facts, not fluff.

[ProSense]

36. You posted a bunch of people's opinions

There are enough credible people who point to its significant reforms. Believe what you want to. The bill passed, and it speaks for itself.

[girl gone mad]

37. No, not just opinions.

factual analysis. There is a difference. Saying "the bill sucks" is an opinion. Saying "the derivatives reform is full of loopholes" is a fact, and one that is rather easy to prove, as Roosevelt Institute Fellow http://baselinescenario.com/2009/12/09/how-to-kill-otc-derivatives-reform-in-two-sentences/">Mike Konczal has done.

[ProSense]

38. Oh brother

Opinion, and highly speculative at that:

The second sentence here allows an intermediary to execute a swap, ignoring the section 2(k) which is the meat of the reform, as long as the swap is recorded somewhere. Now we already have, from above, that a swap execution facility can be something other than the exchange. This is a rule that guts the regulation right out the door, and for no apparent benefit to reform. Many of these alternative swap facilities will be owned by the banks, so it won’t necessarily force the price transparency that has been promised. To trust regulators to simply do the right thing is naive at best when the ability to follow fixed rules is available.

From what I’m hearing, it is possible Frank doesn’t even know that this language, once in the bill as an amendment but removed, has snuck back into his reform legislation. Things are moving very quickly on the hill right now, and this is scheduled to be wrapped up by tomorrow. However this new language runs counter to the reforms Frank has promised to deliver to the American people. Either this language needs to be clarified before the bill is complete, or removed entirely.

Still, claiming that an expansive reform package isn't reform because something isn't perfect is absurd.

[girl gone mad]

39. The loopholes are a fact.

Konczal spelled out very clearly how the rules in this piece of legislation have been written to allow banks to avoid regulation. Do you honestly believe that the banks are just going to play nice-nice and stop with the unregulated swaps because the press release you quoted says so?

Pay close attention, because as I type, a dozen financial engineers and another dozen corporate attorneys have already solidified plans to further obfuscate the language in the Senate version, and a hundred lobbyists are working overtime to make sure that it happens. That isn't mere speculation, it's the real world.

Don't act so naive. The derivatives reform is next to worthless and the very credible financial expert Mike Konczal just told you why. The fact that the bill was written in a way that permits banks to essentially carry on business as usual is an unlikely happenstance. You can pretend this is just someone's baseless opinion, not an actual fact about the way the bill is written, if that's the faux reality you prefer. Back on earth, those lobbyists, lawyers and quants will be cleaning congress's clock a thousand different ways, because they know they can. The bill was designed that way.

That isn't simply an imperfection. It's a fundamental failure.

[girl gone mad]

40. One more thing..

While you might prefer to ignore Konczal's warnings and pretend it's all unicorns and rainbows, I can promise you that the banksters know these loopholes inside and out by now and are fully prepared to exploit them.

Ersatz reform is worthless, worse than nothing because it prevents us from getting the genuine reform that we so desperately need.

[spiritual_gunfighter]

43. Thank you for the thoughtful post

that is backed up by facts. Something ProSense was short on, the reality is that this bill might actually make things worse, something you illustrated in your posts. But I guess as long as we have a shitty bill with the word reform attached to it, its all just peachy.

[vaberella]

16. I see it done to Obama regularly by DUers. nt

[Kdillard]

6. Thanks I am happy for this first step naysayers be damned.

[ProSense]

13. Statements from the CBC and Maxine Waters

Chairwoman Barbara Lee Statement on The Wall Street Reform and Consumer Protection Act

(Washington, D.C.)- Rep. Barbara Lee (D-CA), Chairwoman of the Congressional Black Caucus, released the following statement today on the passage of The Wall Street Reform and Consumer Protection Act:

“I applaud and welcome the passage of H.R. 4173, The Wall Street Reform and Consumer Protection Act. This legislation will provide critical financial reforms and strong protections for consumers. It is vital that we have a stand alone agency whose sole mission is to protect the rights of consumers.

“For too long our financial regulatory framework put the protection and stability of financial institutions first and too often ignored the impact on American consumers and retail investors. The Consumer Financial Protection Agency will help ensure that Wall Street will not be able to bring our economy to the brink of disaster ever again.

“I thank Chairman Frank and members of the Financial Services Committee for working with Rep. Maxine Waters, chair the Subcommittee on Housing and Community Opportunity, and members of the Congressional Black Caucus to include several important provisions in the bill.
“Specifically, thanks to their focused work, this bill will include $3 billion in funds to provide relief for unemployed homeowners. It will extend credit for the recently unemployed that will help save homes from foreclosure.

“This bill will stop the spread of foreclosure rescue scams and includes a vital $1 billion increase in Neighborhood Stabilization Funds to protect our hardest hit communities.

“Lower income communities and communities of color were targeted for these unaffordable and unethical products that are now driving millions of families into foreclosure.

“Access to financial services and insurance products for historically underserved communities is strengthened. The Office of Minority Inclusion, whose goal will be to make sure that all Americans have the equal protection of the work of the work of the entire federal financial regulatory framework is included in this bill.

“Fairness of access and opportunity, transparency and strong enforcement of securities regulations are vital to bringing our economy back from recession and ensuring that the uncontrolled risk taking on Wall Street will never again have such a devastating impact on the entire economy.”

Congressional Black Caucus Members of the House Financial Services Committee include Rep. Maxine Waters, CA, Rep. Melvin L. Watt, NC, Rep. Gregory W. Meeks, NY, Rep. William Lacy Clay, MO, Rep. David Scott, GA, Rep. Al Green, TX, Rep. Emanuel Cleaver, MO, Rep. Gwen Moore, WI, Rep. Keith Ellison, MN, and Rep. Andre Carson, IN.

Congresswoman Waters Applauds Passage of Wall Street Reform Bill

Legislation Includes Key Provisions She Authored to Help Homeowners

10 CBC FSC Members

Washington, DC, Dec 11 -

Congresswoman Maxine Waters (D-CA) today applauded the passage of the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173), which included key provisions she authored related to homeowner assistance and consumer protection.

Congresswoman Waters led a group of Congressional Black Caucus (CBC) lawmakers on the Financial Services Committee in securing $4 billion within the Wall Street reform package for homeowners and communities dealing with the foreclosure crisis. The CBC Financial Services Committee members engaged in discussions with leaders of Congress as well as officials from the Obama Administration to focus attention on the economic challenges many African-American communities are facing and secure funding for homeowner assistance programs.

“This Wall Street reform bill will allow us to stop risky banks and other institutions before they create systemic problems for our whole economy and will provide for a historic Consumer Financial Protection Agency to advocate for the needs of homeowners, consumers and borrowers. And through our advocacy, the CBC members on the Financial Services Committee made it clear that foreclosures and unemployment also pose systemic risks to American families, and needed to be addressed in this bill,” said Congresswoman Waters.

Under the CBC proposal included in the bill, a total of $3 billion would be available so homeowners with reduced income as a result of unemployment, underemployment or medical conditions can receive low-interest loans from the Department of Housing and Urban Development (HUD) to help them stay in their homes. To qualify, individuals must be at least 3 months behind on their mortgage payments, have received a foreclosure notice, and must have a reasonable prospect of being able to resume making full mortgage payments. Homeowners will be eligible to receive low-interest loans for up to 24 months, up to a total of $50,000, to make their mortgage payments.

An additional $1 billion will be directed to the Neighborhood Stabilization Program to provide grants to state and local governments to purchase foreclosed properties, fix them up and make them available for rent or purchase by low- and middle-income families. Created last year through legislation authored by Congresswoman Waters, the Neighborhood Stabilization Program has been a key tool for local governments combating the foreclosure crisis.

Congresswoman Waters also secured key provisions related to diversity and consumer protection within H.R. 4173 during consideration of the bill within the Financial Services Committee.

The Committee adopted an amendment from Congresswoman Waters and the other CBC members establishing Offices of Minority and Women Inclusion at all major federal financial agencies, including the Department of the Treasury, Federal Deposit Insurance Corporation, Federal Housing Finance Agency, the Securities and Exchange Commission and each of the Federal Reserve Banks, along with other agencies.

“Federal financial services agencies have historically lagged in providing contracting and employment opportunities to qualified minority professionals. This provision represents an unprecedented and long overdue step towards ensuring diversity and inclusion with respect to employment and business opportunities with the Federal government,” said Congresswoman Waters.

Another amendment authored by Congresswoman Waters will restructure the Oversight Board of a new Consumer Financial Protection Agency to reflect consumers’ voices. The Congresswoman’s amendment expanded the Board to include not only officials from federal government agencies, but also experts and advocates in the areas of consumer protection, fair lending and civil rights, representatives of depository institutions that operate in underserved communities, and advocates from communities most affected by subprime and predatory loans.

An additional amendment authored by Congresswoman Waters and adopted within the Financial Services Committee requires the Financial Services Oversight Council, an advisory panel made up of eleven state and Federal financial regulators which would identify systemic economic threats, to consider the economic impact of the default of a failing institution on minority and low-income communities. The provision would also require the appropriate federal regulatory agency to take steps to avoid or mitigate the potential adverse effects on such communities before winding down the systemically risky financial firm.

The Committee also passed an amendment offered by the Congresswoman to crack down on foreclosure rescue scams that prey on vulnerable homeowners by requiring that attorneys participating in foreclosure prevention services be subject to regulation by the CFPA.

H.R. 4173 also includes a provision authored by Congresswoman Waters to obligate the new Federal Insurance Office to consider the extent to which minorities, low- and moderate-income persons and underserved communities have access to affordable insurance products.

[Arkana]

15. So-called "liberals" who voted against this should be ashamed.

It is absolute crap to say "HURF DURF IMMA NOT VOTING FER THIS CAUSE IT MEANS THAT NOTHIN ELSE WILL HAPPEN!" It's just absolute lazy bullshit and part of the reason we can never get anything done--because the people who should be voting for it refuse to.

[vaberella]

17. Tell it to Koochie. nt

[Arkana]

18. I realize I'll get a lot of shit from the Saint Dennis of Kucinich crowd for that.

And I'm prepared for it. Because it's just crap what he does--voting against good bills because they don't have everything he wants in them.

Health care was excusable because I have my own misgivings about the House bill--but things like this? Fuck him. He's not a Democrat--he's just a grandstander who wants to be the darling of a certain subset of voters.

[spiritual_gunfighter]

44. Read the up threads

This bill may actually make things worse in the long run. But since you feel like lobbing baseless attacks at liberals, there is probably no reasoning with you anyway.

[girl gone mad]

21. I'm proud of the ones who voted against this fake reform.

Good for them.

[Cha]

31. That's their lazyass damn copout .

Too many progressives voted for it.

[Clio the Leo]

19. Thanks for the PDFs.....

.... it's nice to go to the source.

[moondust]

27. Wake me when it clears the dysfunctional Senate.

:boring:zzzzzzzzzzzz

[Odin2005]

42. The Obama haters can eat crow.