Dodd introduces ‘super czar’ board to rule over banks
Image by David Berkowitz via Flickr
In what promises to create a dilemma for tea baggers everywhere, Senator Chris Dodd (D-Conn.) has introduced legislation to dramatically overhaul the regulation of America’s banks and financial services companies.
Sure to be crowd pleasers are the elements of the bill that would prohibit the federal government from overturning tougher consumer protection laws passed by individual states, the ability to break up ‘too big to fail’ financial institutions and regulation over fancy financial instruments – such as derivatives- which played a large role in the banking crisis of 2008.
Far more controversial to the enemies of big government will be the creation of new federal bureaucracies designed to greatly expand the impact of the federal government in the nation’s financial industries, most prominent among them being the proposed Financial Institutions Regulatory Administration, a board comprised of the FDIC chairman, Fed chairman, and three presidential appointees. The new board will be an independent ‘super-agency’ with expansive federal powers .
The creation of the new super-regulatory body would strip the Fed and the FDIC of direct supervisory and regulatory powers over banks and bank holding companies. It would also result in the Office of Thrift Supervision and Office of the Comptroller of the Currency being abolished.
Two more federal agencies would come into existence as a result of the legislation that would exercise controls over credit cards, mortgages and other financial instruments while cracking down on hedge funds, credit rating agencies and executive pay. There are even controls created within the Treasury Department to keep an eye on insurance companies like AIG.
Basically, the broad ranging bill has something in it to anger just about anyone who participates in the banking and financial services industry.
As expected, the Republicans have presented a united front in opposition as has Wall Street and the commercial banking industry.
What promises to be particularly interesting is the reaction of those who are furious with the damage wrought by the financial establishment on Wall Street but also deplore the expansion of federal power. it is difficult to imagine how the financial behemoths could be regulated by anyone but the federal government considering the products hatched on Wall Street are sold throughout the nation and the world. Still, should Dodd’s grand vision become law, striking new powers would be granted to the federal government to regulate the free market system.
Quite the conundrum.
A summary of the Dodd bill, and the complete 1,136 page bill, are now available for review on-line.
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In what promises to create a dilemma for tea baggers everywhere
No dilemma at all, Rick. As Rick Santelli proved to us at the beginning of this year, our financial overlords are highly capable of donning the second-hand clothing of populism.
Does anyone see political desperation here? Dodd is in re-election trouble at home because of his sleazy Countrywide sweetheart deals, and for taking big bucks from the scandalously undercapitalized Freddie and Fannie while they were spinning out of control. Where was this zeal for oversight when it might have mattered?
No question but that Dodd is trying to score some points back home where he’s getting beat in the polls.
In response to another comment. See in context »Dodd’s contempt for American taxpayers is breathtaking. I’m sure he’s made the calls to his top $$ contributors to put them at ease about his bill gaining any real traction. I think it would be funny if this bill looked like it was going to pass and Dodd was put in the uncomfortable position of voting against it.
In response to another comment. See in context »Dodd’s dollars:
http://www.opensecrets.org/politicians/contrib.php?cycle=Career&cid=N00000581&type=I
I read about this morning to great relief.
Main Street is suffering while Wall Street is enjoying business as usual with bonus money at a record high and front of the line virus protection. Not since the days of the robber barons have a section of our economy revealed themselves as true villains as these high flyers, these self proclaimed masters of the universe who do nothing but push paper and push Americans into unprecedented personal debt.
Obama has ignored this populist political target and has been coddling these unrepentant executives with programs to increase the power of the Fed who were co-conspirators in the melt down.
When did the democratic party reinvent itself as a pro-industry, pro-big business party? (I know, he was a democrat.)
While this shift was engineered and abandoned labor, the middle class has not seen a rise in income in twenty years, has lived off mortgaging the house and now with both the republicans and democrats defending the status quo are wondering: Where is the justice in all of this?
Frankly I am relieved that the answer is coming from a Democrat. Should we care that perhaps Dodd has figured out the political advantage? Thank the stars he has, because if the republicans did they would have taken this to victory in 2010.
The next big battle will be over the economy, it will define the next election period. Whose side would you want to be on?
Defending the banks that are in the process of raising interest rates on everyone’s credit cards, that are raising fees and lowering credit limits in a time of tight credit? Want to defend Wall Street bonuses rewarding the very people who robbed the treasury?
Republicans like to point out that the middle class cannot afford taxes while avoiding the fact that wages are and have been stagnant for over a decade. That big business has prospered, that productivity increased without benefit of a participation in the rewards. That we cling to jobs under the specter that we will be outsourced.
For twenty years no one has spoke for labor.
Democrats need to get back to their roots of defending the working class, of being a populist party.
The Dodd amendment is smart politics and much needed to avoid another devastating melt down. Democrats need to convince the office executives and middle management that they are labor and they have someone in their corner.