Lawmakers have targeted July 4 as the deadline for passage of the Dodd-Frank Act, a bill meant to prevent a repeat of the financial crisis.
The legislation will create the Consumer Financial Protection Bureau to police lending, impose tough regulations on financial derivatives, and grant the government power to liquidate teetering firms. The bill fails to restructure government-backed mortgage giants Fannie Mae and Freddie Mac.
Also, as expected, auto dealers were exempted from oversight by the CFPB.
House and Senate members on the conference committee voted along party lines.
I don’t have an exact timeframe, though I’m guessing it will be a couple years before things ramp up.
Thoughts?
This is sad because it means that the US has officially pronounced that bankers (commercial, retail, investment) are untrustworthy, unethical, and incompetent to manage themselves – therefore here are the new rules and laws to do so. It will take a generation to re-establish any semblance of trust in the “new” banking system. Small community banks and credit unions may not have been as guilty but certainly are contaminated with the broadbrush of public disdain. How can anyone working at a major bank be proud of where they work at present? I hope that this site can provide some comfort, knowledge, and hope for the innocent mid-level and lower level employees that have been sold out by their top management.
Helping customers achieve their financial goals is the best path to re-establish some social standing with the public. When employees see customers being abused by their management – perhaps they will sound an alarm and maybe top management will listen. You can start by going to your “registered investment reps” and asking them to get word to their security analysts of the financial services industry and ask them to ask themselves what the analyst community can do to re-establish “trust” and that answer cannot be “increase earning unreasonably and irrespective of customer abuse”. Want an example? How many retail bankers think that having any product that can cost 29.99% interest is a good product? I suggest that you cannot get any CFA’s to say so. So why would a bank even offer a product that can cause that great sucking sound of wealth from a customers wallet?