Republican Alternative (tighten the Dem’s noose) Financial Reform Planb

BREAKING NEWS UPDATE at the bottom of the page:
(h/t) DaveJ
Tue Apr 27, 2010
At the very last minute, after twice voting to filibuster the bill that took months of bipartisan effort to write, the Republicans are circulating a draft of an alternative Financial Reform plan.

The WSJ Real Time Economics blog posts the Teasers. Here are highlights of the Republican plan, according to a 20-page summary obtained by the Wall Street Journal:

The Republican Financial Reform Plan:

1) RESOLUTION: Would create an orderly liquidation process for financial companies the government believes could have an adverse impact on the financial stability of the country if it collapsed.
a. The Federal Deposit Insurance Corp. would be mandated to break up the company within one year of being appointed receiver, though it could get two six-month extensions. Anything longer than that would take congressional approval.
b. Before a company could be put into resolution, Treasury would have to submit a request with the U.S. District Court for the District of Columbia. This court could only block the government’s move if it found Treasury’s determinations “arbitrary and capricious.”
c. The FDIC would be able to advance funds to creditors, but it would have to recoup from creditors any money a creditor received in excess of what it would have gotten in bankruptcy.
2) FED: Would create a presidentially appointed director of supervision and regulation at the Federal Reserve, who would have to be confirmed by the Senate. The Republican proposal also has strict limits on the Fed’s ability to provide emergency lending, among other things.
3) CONSUMER: Would create a Council for Consumer Financial Protection, that can “promulgate rules for all of the enumerated consumer protection statutes.” The council will have three consumer protection experts, the head of the FDIC, the Comptroller of the Currency, and the Fed Chairman.
a. The council will have supervision and enforcement power over the country’s biggest financial companies. It will also have backup enforcement power over regional banks and credit unions. State laws would be preempted by national laws.
4) FINANCIAL STABILITY: Would create a Council of Financial Regulators to monitor the financial stability of the U.S. “The CFR will formally bring together all federal financial regulators to improve regulation, maintain and monitor financial stability, and coordinate the response of the federal government to any future financial crises.”
5) DERIVATIVES: Create more regulatory transparency, and give the Fed, Securities and Exchange Commission, and Commodity Futures Trading Commission the authority to determine which swap transactions should have to be cleared.” End users who don’t contribute to potential system failure won’t be required to clear their transactions.
a. Regulators will be able to force margin requirements against “swap participants” but not “end users.”
6) UNDERWRITING: Anyone who underwrites a mortgage which doesn’t meet minimum underwriting rules would have to retain at least 5% economic interest in the trust.
7) GSEs: Creates a special inspector general within the Treasury to investigate and report to Congress on the conservatorships of Fannie Mae and Freddie Mac. The Republican plan would create federal funding limits and mandatory portfolio reductions for the companies. It will also restrict the amount of money the government can advance the firms.
8) SEC: would create five divisions within the SEC. The divisions would be 1) retail investor protection and retail financial services, 2) division of trading, 3) division of corporate disclosure, 4) division of enforcement, 5) division of economic analysis.

One thing I see is that instead of an agency to protect consumers from financial scams they would set up a “Council for Consumer Financial Protection” that only covers the biggest financial companies.

“It also pre-empts state laws, so states that protect consumers won’t be able to do that anymore.

Matt Yglesias at Think Progress writes, “It also does . . . something . . . on Fannie Mae and Freddie Mac but it’s impossible to tell what.”

Brad DeLong writes, “Republicans Propose to Replace the Flawed DoddFinReg Bill with… the DoddFinReg Bill”!

I say move the Republican alternative to the Senate floor tomorrow!”

http://www.openleft.com/diary/18465/republican-alternative-financial-reform-plan

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And I say: Where the Tax Payers have been left holding the bag once again, reform should begin with banks and Wall St generating income with the self-regulating ability of The TOBIN TAX.

BREAKING:UPDATE:

GOP poised to abandon stall of banking bill

WASHINGTON – Senate Republicans are prepared to end their stalling tactics on new banking regulations and will attempt to change the bill on the Senate floor, Republican officials said.

Sen. Richard Shelby, the top Republican on the Senate Banking committee, said he has assurances that Democrats will adjust his banking regulation bill to address concerns that it perpetuates bailouts.

The concession sets the stage for Republicans to withdraw objections that have stalled the bill in the Senate.

The agreement does not bridge other significant differences between the parties on the bill.

Democrats tried three times to begin debate on the bill only to be thwarted by Republican opposition. Democrats branded the Republicans as Wall Street allies.
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THE REPUBLICANS ARE LAUGHABLE- FEIGNED RESISTANCE TO DEMS BILL IS CHILLING. WHEN IN FACT WE’VE LEARNED THE BILLS ARE IDENTICAL AND THE REPUBLICAN VERSION HAS TIGHTENED THE LANGUAGE IN THE DODD BILL. WHICH MEANS THE BILL WAS WRITTEN IN FAVOR OF THE BANKS AND WALL ST. THE FINANCIAL REFORM BILL IS THE EVIL TWIN OF THE HEALTH CARE REFORM BILL. NEITHER FAVOR OR PROTECT AMERICANS FROM THE FINANCIAL VULTURES.

Check here for more BREAKING news:
UPDATE

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