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Tag >> financial reform bill
Some of the more interesting features of the new financial reform bill are the overlooked provisions that received virtually no attention before President Obama signed it.
Perhaps the most disturbing: The Securities and Exchange Commission is no longer required to comply with most requests for information, including those filed under the Freedom of Information Act.
Visa and Mastercard dodged a major bullet as the financial reform signed into law last week didn't regulate debit card network fees, which they collect for each debit card swipe processed through their payment networks. However, the new law will likely reduce debit interchange fees, the fees that merchants pay to banks to process debit card payments from consumers.
As a result, although banks will be negatively impacted by a reduction in debit card fees they receive from merchants, they will also be able to pass on the extra cost to debit card companies and debit card holders.
Warning to Corporate America: Brace for a surge in bribery accusations.
The whistleblower provisions of the financial regulation bill signed by President Obama on Wednesday could lead to an increase in enforcement of the Foreign Corrupt Practices Act (FCPA), says law firm Morrison & Foerster.
As Ron Fink noted earlier, the new financial reform bill has four provisions strengthening whistleblower rights, including financial incentives and legal protection against retaliation. http://www.cfozone.com/index.php/Compliance/Corporate-whistle-blowing-encouraged-by-financial-reform.html
During 2009 and the first quarter of 2010, 850 businesses and organizations spent $1.3 billion to lobby elected officials on Capitol Hill. While the disclosure forms don't show the exact amount allocated just to financial system reform, it's likely that the subject accounted for several hundred million dollars of the total, according to the Center for Public Integrity.
So it may come as a surprise to find that not all businesses are dead-set against all proposed reforms. Case in point: while the Independent Community Bankers of America has not taken a public stance on a specific bill, information on its website and comments from IBCA leaders indicate that it's in favor of reforming the system, and that some of the rhetoric surrounding the issue has obscured the probable potential impact on community banks. "The community banks had huge differences from the Wall Street crowd," says Steve Verdier, ICBA's executive vice president and director of Congressional affairs. "We viewed ourselves just like any small business that had suffered from the excesses of Wall Street."
While Wall Street banks also profess to favor reform, their rhetoric hardly matches reality in so far as they've worked to gut or at least soften the legislation's toughest provisions, breathlessly and repeatedly warning about their potential to harm the economy. Now consider the section of the ICBA site entitled, "Myths and Facts about the Senate Financial Reform Bill." The ICBA notes that concerns about potentially burdensome regulation that may result from The Restoring American Financial Stability Act of 2010 (S. 3217) "can be exaggerated to the point that the benefits of the bill are overlooked." The site also points out the bill would not allow for endless bailouts of large financial firms, but would instead extend authority to the FDIC to administer a fund to wind down or sell off operations of failed financial firms.
Elsewhere on the site, the ICBA says that it wants to preserve the Federal Reserve's authority over its state member banks. Without this, "The Fed would become the central bank of Wall Street, not the United States." Similarly, the group advocates ending the commercial ownership of banks by firms such as General Motors or Wal-Mart. As others, including members of the Fed's Board of Governors, have noted, these industrial loan companies (ILCs) have many of the privileges of banks, such as access to the Fed's discount window and payment system, but don't have to follow the same rules that other banks do.
To be sure, some state community banking associations have indicated their opposition to regulatory reform. The Montana Bankers Association issued a release in May that said of the Senate reform bill, "It's a tragedy that this 1,500-plus page bill now moves forward."
Camden Fine, ICBA's president and CEO appears to see things differently. Consider his blog post of June 23:
Ever wonder about the millions, nay hundreds of millions, in Wall Street and megabank dollars spent on countless legions of lobbyists? For Wall Street and the megabanks, lobbying the financial reform bill is all about protecting billions of dollars in profits. It is about keeping their too-big-to-fail status and the market advantages and perks such status gives them. It is about preserving the privileged place in the financial services sector they have gained through legislation and regulations over the past 30 years.
The financial reform bill contains a small-business related amendment that hasn't received a lot of attention. And it's either very small-business friendly or very unfriendly, depending on whom you listen to.
Sponsored by Senator Olympia Snowe of Maine, the ranking Republican on the Small Business Committee, it directs the new Consumer Financial Protection Bureau to take into account how proposed regulations would affect the cost of credit to small companies. It also mandates that the bureau be covered by the Small Business Regulatory Enforcement Fairness Act of 1996.
Posted by Ron F in Risk, Regulation, Goldman Sachs, GAAP, financial reform bill, financial market reform, financial crisis, FASB, derivatives, credit default swaps, Congress, compliance, Banks, banking reform, Banking, bank failures, bailout, AIG, Accounting
The latest revelations concerning the dispute between AIG and Goldman over collateral show how weak the new financial reform package really is.
After all, Goldman's demands for collateral from AIG as it was failing ended up costing taxpayers billions of dollars. Yet according to the testimony today during the crisis panel's latest hearings, the whole question hinged on what constituted fair value.
Companies are either surprised by the say-on-pay provision in the financial reform bill or dismissing its importance, judging from a new Towers Watson survey.
It found that only 12 percent of respondents said they are very well prepared for the say-on-pay legislation, while 46 percent said they were somewhat prepared. Some 22 percent said they didn't know if their companies were ready.