You may be wondering why you haven’t seen a post overview on the latest Senator Dodd’s Financial Reform Bill, Restoring American Financial Stability Act of 2010 (link has legislative summary and text). That’s because, as usual, it’s a dud.
Firstly a few summary points are listed here. The Huffington Post has a list of other criticisms, including the political on Dodd 2.0. Also, yet another New York Times op-ed points to the well known fact, putting the CFPA under the Federal Reserve will de facto kill consumer financial protection.
Make no mistake, the Republicans aren’t in the people’s camp either on this, now looking to just run out the clock.
Paul Volcker, testifying before the House Financial Services Committee, who has been blown off in his policy recommendations by the Dodd Dud, testified that regulators cannot be trusted to do anything (and isn’t the proof in this pudding!) and this is why you need to break up commercial banking from investment banking.
In my opinion, it’s very unlikely that the regulators and supervisors would evoke a strict prohibition until a crisis came and then it’s too late,” Volcker said. “That’s why you want it in legislation.”