Jump to content
Sign in to follow this  
justashooter

far from protecting the little guy and sticking it to the fat cats

1 post in this topic

Recommended Posts

Chris Dodd's carve-outs for cronies

By MARK A. CALABRIA

Last Updated: 4:43 AM, April 27, 2010

Posted: 1:05 AM, April 27, 2010

The financial-regulatory bill now before the Senate is so filled with special-interest loopholes and exclusions that it makes the health-care "reform" bill, with its "Cornhusker Kickback" and "Louisiana Purchase," look like a model of rectitude.

The Senate bill, sponsored by Democrat Chris Dodd, claims to subject all "too big to fail" institutions to greater federal supervision, but in fact it only mandates such regulation for bank-holding companies. Regulators would have to make a case-by-case decision on whether to apply it to other financial companies.

That's no minor oversight, because insurance companies, like AIG, tend to have thrift charters rather than bank charters. So, as the bill stands now, AIG and other insurers that accepted massive bailout funds, such as The Hartford, would not be automatically covered. That's a head-scratcher only if you forget that most insurance companies reside in Dodd's home state, Connecticut.

But the section of the bill most littered with exemptions is probably the proposed consumer-protection bureau. In some instances, these exclusions actually roll back existing consumer protections.

Remember the mortgage crisis? Well, the primary consumer-protection law for homebuyers is the 1974 Real Estate Settlement Procedures Act. The law requires the timely, accurate disclosure of relevant closing costs and prohibits "kickbacks" for the steering of settlement services.

For example, your real-estate agent cannot, under RESPA, be paid a fee for steering you toward a certain home inspector, title company or other closing service. Yet, under the Dodd bill, real-estate agents would be exempted from RESPA. If that weren't bad enough, the Dodd bill exempts insurers and attorneys -- both now subject to RESPA -- from its consumer protections, too.

Having spent some time running the RESPA office at US Department of Housing and Urban Development, I can tell you its biggest lawbreakers are title-company and real-estate agents. It's hard not to conclude that having the largest political-action committee in Washington has turned out to be a smart move for the National Association of Realtors.

Attorneys, insurers and real-estate agents aren't the only ones exempted from the bill's consumer-protection provisions. The Farm Credit System, a government-sponsored lender that directly competes with banks, is excluded, too. Perhaps this should come as no surprise, because Fannie Mae and Freddie Mac, those crackerjack institutions at the heart of the mortgage meltdown, are also exempt. Worse yet is that Wall Street is exempted from the reach of the proposed consumer-protection agency -- its regulation will remain with the Securities and Exchange Commission, which proved itself asleep at the switch during this last period of financial shenanigans.

President Obama proclaimed in his finger-wagging at Cooper Union last week that "unless your business model depends on bilking people, there is little to fear from these rules." If that's true, then I ask the president: Why not apply these rules to everyone?

It would be bad enough if the special-interest carve-outs ended there.

Deep in Sen. Blanche Lincoln's (D-Ark.) bill, passed by the Agriculture Committee last week (it will be merged with the Dodd bill), are exemptions to rules mandating transparency in the trading of complex financial derivatives, such as the credit-default swaps that figured so prominently in the Wall Street meltdown. One of the most troubling is Sen. Debbie Stabenow's (D-Mich.) amendment that would exclude the captive finance arms of certain manufacturers from the bill's requirements that derivatives only be traded over exchanges and through a clearinghouse. Only a handful of firms would be excluded -- chief among them, of course, the automakers.

The Senate financial-regulation bill offers a stark choice: Do we aspire to be a country where everyone is subject to the same rules? Or do we accept a system where power, influence and money can buy exclusions and exemptions?

The public needs to understand that, far from protecting the little guy and sticking it to the fat cats, this bill keeps good, old-fashioned political patronage alive and well.

Mark A. Calabria is director of financial-reg ulation studies at the Cato Institute. He worked for HUD during the George W. Bush administration.

http://www.nypost.com/p/news/opinion/opedcolumnists/%20chris_dodd_carve_outs_for_cronies_MT1U7GBEPvzX3QXP%3Cbr%20/%3EroqC9L


____________________________________________________________________________

obamasolyndrafleeced-lmao.jpg

Share this post


Link to post
Share on other sites
 

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  
- Back to Top -


Important Disclaimer: Please read carefully the Visajourney.com Terms of Service. If you do not agree to the Terms of Service you should not access or view any page (including this page) on VisaJourney.com. Answers and comments provided on Visajourney.com Forums are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Visajourney.com does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. VisaJourney.com does not condone immigration fraud in any way, shape or manner. VisaJourney.com recommends that if any member or user knows directly of someone involved in fraudulent or illegal activity, that they report such activity directly to the Department of Homeland Security, Immigration and Customs Enforcement. You can contact ICE via email at Immigration.Reply@dhs.gov or you can telephone ICE at 1-866-347-2423. All reported threads/posts containing reference to immigration fraud or illegal activities will be removed from this board. If you feel that you have found inappropriate content, please let us know by contacting us here with a url link to that content. Thank you.
×