We need Elizabeth Warren. David Weidner makes the case in the Wall Street Journal:
There really is no other choice. Ms. Warren, a Harvard Law School Professor who has been chairing the House Oversight Committee minding TARP's progress has been the CPFA's biggest proponent since she floated the idea in 2007. Giving the job to someone else would be like letting Steve Jobs come up with the iPad and then giving it to Microsoft Corp. to market. You'd almost certainly lose the soul.
Ms. Warren has spent the last few years of her career preparing for this moment. She's written about the devastating effects of bankruptcy on U.S. households and has given countless interviews. Consumer protection as a part of financial reform has been her single biggest legacy in Washington, save perhaps for her testy public exchanges about TARP with Treasury Secretary Timothy Geithner.
Wouldn't you know it, that sometimes confrontational relationship has led to speculation that Mr. Geithner was lobbying against Ms. Warren behind the scenes. It's a charge the Treasury Department denies, but not out of the realm of possibility, given Mr. Geithner's public scrapes with her about TARP and his likely support of Michael S. Barr, assistant Treasury Secretary, who is reportedly on the short list.
Even with Mr. Geithner's support or his ambivalence, Ms. Warren seems to have worn out her Washington welcome. Senate Banking Committee Chairman Sen. Chris Dodd (D.,-Conn.) on Monday openly wondered whether Ms. Warren would get enough votes for confirmation should she be nominated. "The question is, 'Is she confirmable?'" Sen. Dodd told NPR's Diane Rehm show. "And there's a serious question about it."
Edward Yingling, chief executive of the American Bankers Association, said there's "tremendous concern" in the industry over Ms. Warren's possible nomination. State banking groups in Virginia and Nebraska have vocally opposed her nomination. The U.S. Chamber of Commerce spent millions on an ad campaign against the protection agency.
Good. We don't need an financial industry shill regulating the financial industry. We need a real independent watchdog. There's no better choice than Elizabeth Warren.
Today was an historic day.
We did it. Heather Booth of Americans for Financial Reform celebrates:
With his signature, President Obama ushers in a sea change after decades when the big banks were allowed to write their own rules, take advantage of consumers, and collect huge bonuses for themselves while leaving the rest of us to pay the costs of their recklessness. The financial reform legislation will empower consumers by putting an independent advocate on their side when it comes to buying homes and managing their credit. Banks and other financial institutions will no longer be allowed to gamble with our money for their profit, and risky investments will be forced out into the light of day. Families and businesses alike will benefit from increased transparency and security, and from pushing banks away from speculation and towards making sound loans.
We applaud the President and Congress for their leadership in guiding this legislation into law, a clear victory for Main Street. We look forward to ensuring that these strong reforms are implemented with all Americans in mind.
Today, we celebrate. Tomorrow, we get back to work.
Chris Dodd and Barney Frank take a lot of flack from all sides. But, they rarely get credit when credit is due. The Consumer Federation of America (CFA) gives them kudos in a letter they sent today:
Thank you for your pro-consumer, pro-investor vote on the landmark Dodd-Frank financial regulatory reform bill. This historic legislation provides a sweeping overhaul of federal financial regulations that should help protect consumers, Main Street investors, and the economy for decades to come.
CFA is particularly supportive of the creation of the Consumer Financial Protection Bureau to guard against unfair, deceptive and abusive practices when consumers take out a loan, use a credit card, or get a mortgage. The Dodd-Frank bill includes provisions that are crucial to an effective bureau, such as making the CFPB autonomous, with independent funding, and led by a single director. The bill also allows states to go beyond the CFPB’s rules to rein in a local problem prior to it erupting into a national disaster.
The new restrictions on mortgage lending are also important. Had these provisions been in place years ago, we may not have seen the crisis in mortgage lending that we are still dealing with today. We are particularly supportive of the restrictions on prepayment penalties on mortgages, a requirement that mortgage lenders ensure that home loans are affordable to the borrower, and a prohibition on steering consumers into unaffordable loans.
For years, CFA has promoted the need for brokers to have the same fiduciary duty requirement to work in the best interest of their customers when they give investment advice as Investment Advisers have. The Dodd-Frank bill gives the Securities and Exchange Commission the clear authority to write rules to this effect. Other important provisions for Main Street investors include: creation of a powerful new Investor Advocate Office within the SEC, elimination or limits on the use of pre-dispute binding arbitration clauses in brokerage and investment adviser contracts, improved disclosures, reform of broker-dealer compensation practices, and strengthened SEC enforcement tools.
Finally, CFA is supportive of the provisions that strengthen regulatory oversight of ratings agencies, increase rating agency accountability, and improve rating transparency. The Dodd-Frank bill also includes strong provisions on the key issues of moving the majority of clearable swaps into central clearing, requiring exchange trading, increasing capital and margin requirements, and other measures to improve the stability, transparency, and regulatory oversight of the derivatives market.
For the legislation to achieve its goals, regulators will need to provide the kind of vigorous oversight of the financial services industry that was lacking in the years leading up to the crisis. We look forward to working with them, and with you, to ensure that this legislation is implemented so that it fulfills its mission of helping consumers, thereby strengthening our entire economy.
While there is certainly more work that needs to be done, Wall Street Reform is an historic piece of legislation that will protect American consumers for generations to come.
It's done. The most comprehensive reform of the financial system since the Great Depression. Heather Booth of Americans for Financial Security analyzes what the bill means for us:
Nearly two years after the reckless behavior of the Big Banks took our economy to the edge of the abyss and cost 8 million Americans their jobs, Congress has passed and sent to the President the most significant legislation to rein in Wall Street and the Big Banks since the Great Depression. These reforms will bring transparency and accountability to Wall Street, and protect consumers on Main Street.
The big lesson is that if we organize, we can win. The progress we made was because people raised our voices, took the message to the public, to the streets, and to the Halls of Congress, where we were joined in our efforts by some committed elected representatives.
The forces arrayed against us had overwhelming resources, and hundreds of billions of dollars at stake in protecting the status quo. But we proved that when we fight back, and stand together, we can win victories against even the biggest and best-funded opponents of change. The big banks spent $1.4 million dollars a day lobbying to kill reform and they did not succeed.
We didn't win every battle, and there is still far more work to be done. This is the beginning not the end of the fight to restore the rightful place of the financial system as the servant, not the master, of the real economy. The Big Banks, and their high priced lobbyists, will continue to work to weaken or gut reforms as this bill becomes law and the regulatory agencies begin to try to implement it. We need to stay vigilant and active to make sure the implementation of the law fulfills its promise, on appointments, and on areas not addressed, or that need to be more forcefully addressed, including the continuing foreclosure crisis, too big to fail and the financial speculation tax, among others.
But the legislation headed to the President's desk is a better start than almost anyone predicted was possible in the face of the powerful opposition and entrenched power of the status quo. We won. Now let's get back to work.
Some of the highlights of the bill are:
Landmark consumer protection: Consumers will now have an independent advocate on their side to prevent tricks and traps related to mortgages, payday loans and checking accounts. Credit cards and mortgages will offer terms in language we can all understand. It will also offer help for those abused by predatory lenders and limit banks from charging businesses hefty fees for debit-card purchases.
Shining Light on Shadow Markets: The $600 trillion derivatives market will now operate in the open, so regulators can catch problems - like the credit default swaps that brought down the economy - before they happen. Most deals will have to be backed up by clearinghouses and traded on public exchanges. The participants will have to actually prove they have the money to cover their bets. In addition, hedge funds and private equity funds will have to register with the SEC and have regulators watching over them.
Preventing taxpayer bailouts: The government will have the authority to step in and safely shut down any failing financial firm, not just banks, instead of propping them up with taxpayer money. One regulator will be in charge of watching for emerging threats to the whole financial system - and will have the tools and authority to ensure those threats are actually visible.
Reining in the Wall Street Casino: Banks will be barred from gambling for their own account with your money. Banks will have to separate some of their derivatives trading operations into affiliates.
Mortgage reforms: For the first time lenders are prohibited from making loans that borrowers cannot repay, and banned from receiving kickbacks for steering people into high rate loans when they qualify for lower rates. Consumers are protected from abusive loan fees and penalties for prepaying.
Strong investor protections and more corporate accountability: Shareholders will have new tools to hold corporate boards and management accountable, including a voice on executive compensation decisions and an enhanced ability to nominate and elect corporate directors. Brokers will have to act in the best interests of their customers.
Holding Credit Rating Agencies Accountable: Credit rating agencies will no longer have a vested financial interest in giving high ratings to risky investments. Better controls will hold rating agencies accountable for the reliability of their reporting. Investors will be able to sue credit rating agencies who slap a high rating on a risky investment.
Opens the Fed's books: The Fed's emergency lending programs from the financial crisis will be audited to see where the money went. The Fed will also have to disclose loans it makes to banks through its discount window.
Thanks to all who raised their voices, demonstrated, sent emails, analyzed the policy, blogged and promoted the issue, contacted congress and engaged your neighbors, friends and families. You made this victory possible. And the struggle continues.
This was a great victory. But, our work does not end. We will continue to work to hold Wall Street and their Republicans accountable for the financial crisis and work to continue to strengthen our laws.
Wall Street used an army of K Street lobbyists to oppose and water down reform. We used people power to press our case. We kept up the pressure. And, we stand at the brink of passing historic legislation. Politico reports:
A major Wall Street reform bill that seemed in trouble just a few weeks ago now seems likely to become law, perhaps in a few days.
And if it does, it will be an important addition to the record of accomplishment of a president who as recently as last fall was being mocked on “Saturday Night Live” for achieving “nothing.”
What’s more, he was helped to the 60-vote finish line on the financial regulatory reform bill by Republicans, including the man responsible for the administration’s greatest electoral humiliation so far, Sen. Scott Brown of Massachusetts, as well as Sens. Olympia Snowe and Susan Collins of Maine.
All were among the objects of grass-roots lobbying over the Independence Day recess by groups such as the progressive coalition Americans for Financial Reform.
For instance, activists and experts gathered outside the offices of Snowe and Collins last week to urge the duo to vote yes. Supporters also used the event to thank Maine House members who supported the legislation when it passed the chamber June 30.
“All these events are thanking the members for their support of Main Street and for holding big banks accountable and urging senators in the state to finish the bill,” said AFR spokeswoman Lauren Weiner. “Thanking House members is a perfect way to show the kind of support the senators will get when they vote for Main Street.”
The coalition did similar events in Delaware, Arkansas, Michigan, Missouri and Washington, Weiner said.
During the weeklong recess, AFR did work in 17 states that included sending letters to the editors, meeting with newspaper editorial boards and calling voters and patching them through to their senators. Meanwhile, AFR ally U.S. Public Interest Research Group was organizing events in another seven states, she said.
In Kansas, the group’s affiliates met with clergy and called on them to push their senators to vote for the bill.
And this week, the Iowa affiliate was planning to set up a finish line in Des Moines to urge Sen. Chuck Grassley (R-Iowa) to help reform complete its legislative race, Weiner said. (As of Tuesday afternoon, Grassley remained “undecided.”)
Brown made his announcement Monday.
While Wall Street relied on lobbyists, we organized citizens to make our case. And, this time, people power won.