Wall Street reform gridlock seen after US elections
By Kevin Drawbaugh
WASHINGTON, Oct 28 (Reuters) – If Republicans make big gains in U.S. Congressional elections on Tuesday, as expected, Wall Street and big banks will have sweet, but incomplete, revenge on Democrats who drove through sweeping financial reforms against industry opposition.
The likeliest outcome of Democrats losing control of one or both chambers of Congress will be divided government and two years of legislative gridlock on issues important to the financial services sector, said policy analysts and aides.
That means the sector’s regulatory headaches — near migraine level following the enactment in July of the Dodd-Frank Wall Street Reform and Consumer Protection Act — won’t get worse, but probably won’t get much better, either.
“We expect two years of deep gridlock … Nibbling at the edges of Dodd-Frank and some cosmetic changes to the new law are possible. Fundamental changes are highly unlikely,” said Brian Gardner, policy analyst at Keefe, Bruyette & Woods.
That outlook could shift if a new breed of far-right Tea Party activists being swept into power pushes the Republican Party to confrontational extremes, which is a possibility. One scenario might be an effort to strangle Dodd-Frank by depriving regulators of funding needed to implement it, aides said.
“It’s hard to predict what this iteration of the Republican Party is going to do. They’re being driven to the far right by the Tea Party. Normal rules of fiscal responsibility and governance may not apply,” said David Min, associate director at the Center for American Progress, a liberal think tank.
ANALYSIS-Warren carries clout in US financial consumer job
By Caren Bohan and Dave Clarke
WASHINGTON, Sept 17 (Reuters) – From an exclusive perch close to the seat of power, Wall Street nemesis Elizabeth Warren will have plenty of autonomy as well as President Barack Obama’s ear.
The Harvard law professor, whose grandmother drove a wagon in the Oklahoma land rush, is a folk hero for consumer groups and the bane of Wall Street. She will build from scratch a new government agency to crack down on abusive practices in financial products like mortgages and credit cards.
FACTBOX-New US consumer financial bureau has wide powers
Sept 14 (Reuters) – President Barack Obama is expected soon to pick the director of a new U.S. Consumer Financial Protection Bureau that will regulate mortgages, credit cards and other financial goods and services.
Congress created the bureau in response to widespread deception and abuse of borrowers during the credit bubble that burst two years ago, triggering a global financial crisis.
Here is a profile of the new watchdog unit, called for under Wall Street reforms that were written into law in July.
Listen, it’s a good thing that payday lenders, banks and creditors are starting to be regulated, but I don’t think it’s right that politicians are telling us what is financially healthy or unhealthy in our own lives. I think you need to give people all the information they need and allow them to make their own informed decisions. I think I am smart enough to read the paperwork and figure out my best option!
ANALYSIS-Consumer chief delay could hobble new US agency
By Dave Clarke
WASHINGTON, Sept 7 (Reuters) – Prospects are dimming that a new U.S. consumer agency head will be in place this year, prompting fears that what was envisioned by supporters as a powerful watchdog could get off to a rocky start.
A dwindling legislative calendar and Republican momentum going into the November elections could lead to a protracted confirmation process, especially if the White House nominates Harvard law professor Elizabeth Warren, who Wall Street has blasted for her attacks on banking practices.
ANALYSIS-Wall Street loathing for Warren lifts bid for regulatory post
By Maria Aspan and Kim Dixon
NEW YORK/WASHINGTON, July 26 (Reuters) – Elizabeth Warren, clad in cardigans and pearls, has become Wall Street’s public enemy No. 1, but that very vitriol that could earn her a post heading the government’s new consumer watchdog agency.
“I get disgusted every time I hear her speak. It’s like she’s sitting in some ivory tower, not understanding the ramifications of anything she says,” said Anton Schutz, president of Mendon Capital Advisors. “Any person you put in that role really ought to have some industry experience.”
Warren, a Harvard law professor and outspoken consumer rights advocate, is currently a top monitor of the government’s $700 billion bailout of the financial system.
Now she is one of the main contenders to head the Consumer Financial Protection Bureau, an agency to regulate financial products ranging from credit cards to mortgages.
Banks bitterly opposed White House efforts to create the agency, but lawmakers pushed it through as part of the Wall Street reform legislation passed this month.
Now, industry players, fearing a profit crunch, are taking aim at the woman who could be their new regulator, calling Warren dogmatic and unwilling to compromise. Their aim? To convince Washington she cannot secure the kind of compromise or cooperation needed to push reforms through.
Elizabeth Warren is the ONLY one to do this job. If Wall Street is shaking in their boots, they have good reason to.
She will bring these financial schemers, cheaters, and theives down to their knees.
ANALYSIS-Deck chairs secure aboard USS Financial Regulation
By Kevin Drawbaugh
WASHINGTON, March 21 (Reuters) – The big U.S. government agencies in charge of policing banks and markets, despite being excoriated over the severe 2008-2009 financial crisis, have successfully dodged a major structural shake-up.
While Congress may yet clamp down on the financial industry from Wall Street to Main Street, a top-to-bottom overhaul of the nation’s regulatory apparatus — which seemed like a certainty a year and a half ago — is not going to happen.
As political reality has tempered reform proposals, plans to reconfigure a patchwork bureaucracy stitched together over decades have faded from view, with just one agency closure still on the negotiating table.
Only the Office of Thrift Supervision — smallest and newest of the big seven agencies — is likely to be closed with regulatory reform bills in both the Senate and the House of Representatives targeting it for shutdown.
Otherwise, thousands of workers will stay in place at the Securities and Exchange Commission, the Federal Reserve, the Office of the Comptroller of the Currency and other agencies ensconced in stately, federal buildings across Washington.
Some of their work assignments may change — if Congress actually produces a bill this year and President Barack Obama signs it.
INTERVIEW-Rep Frank: Fed as consumer watchdog home a “joke”
WASHINGTON, March 2 (Reuters) – Representative Barney Frank, chief architect of financial reform in the U.S. Congress, told Reuters on Tuesday he “thought it was a joke” when he learned key senators were discussing putting a new financial consumer watchdog inside the Federal Reserve.
“I thought it was a joke at first, to be honest, with all this denunciation of the Fed,” Frank said in an interview.
“If that’s the price of a Republican deal, then it’s not a good deal and the House wouldn’t accept it,” he said.
President Barack Obama’s plan to set up an independent Consumer Financial Protection Agency (CFPA) to regulate mortgages and credit cards has been the main obstacle for weeks to a bipartisan Senate compromise on financial reform.
Senate Banking Committee Christopher Dodd, a Democrat, is discussing putting the watchdog inside the Fed as a possible compromise with Republicans, who oppose an independent agency. (Reporting by Kevin Drawbaugh; Editing by Dan Grebler) ((kevin.drawbaugh@thomsonreuters.com, +1 202 898 8390, +1 202 488 3459 (fax))) h
U.S. Senator Shelby counters on financial consumer watchdog
By Kevin Drawbaugh and Rachelle Younglai
WASHINGTON, March 1 (Reuters) – A senior Republican U.S. senator has made at least two counter-offers to Democrats on creating a new government watchdog for financial consumers, Reuters learned on Monday from aides and documents.
Senator Richard Shelby proposed making the watchdog a division of the Federal Deposit Insurance Corp, with some rule-writing power and a director who is appointed by the president and confirmed by the Senate, documents showed.
Shelby, the top Republican on the Senate Banking Committee, also has proposed setting up a three-member consumer protection council, said a congressional aide.
Both offers show that negotiations between Shelby and Senator Christopher Dodd, the committee’s Democratic chairman, on a bipartisan financial regulation reform bill are in full swing, but still have some ground to cover.
After marathon talks over the weekend, lawmakers remained snagged on how much rule-writing power the new watchdog should have, no matter where it is located within the government.
“We are at the start of a political dance between Dodd and Shelby. We expect more draft language — and more headlines — throughout the week,” said financial services policy analyst Jaret Seiberg at investment advisory firm Concept Capital.
Deal on financial reform bill near in U.S. Senate
By Kevin Drawbaugh WASHINGTON, Feb 25 (Reuters) – A bipartisan agreement on financial regulation reform was close at hand on Thursday in the U.S. Senate, with lawmakers working to overcome a key obstacle — creating a new financial consumer watchdog. (more…)
US’ Geithner pushes for independent consumer agency
WASHINGTON, Feb 22 (Reuters) – The Obama administration is still fighting for a single, independent consumer financial protection agency, U.S. Treasury Secretary Timothy Geithner said on Monday as lawmakers haggled over a financial reform bill. (more…)
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