NYTimes - “Senator Bob Corker, the Tennessee Republican who is playing a crucial role in bipartisan negotiations over financial regulation, pressed to remove a provision from draft legislation that would have empowered federal authorities to crack down on payday lenders, people involved in the talks said. The industry is politically influential in his home state and a significant contributor to his campaigns, records show.”
Share
Thomas F. Cooley – Forbes - “Consumer protection is important, but it is something of a sideshow in the financial crisis. Much more is at stake in the proposals to address systemic risk and the regulation of the large financial institutions. This is what brought the financial system to the brink of collapse. There is a legitimate concern that this shell game over the CFPA could derail the most important aspects of financial reform and politicize the Fed.
Consumer protection is inherently highly politicized because there are so many constituents–both businesses and consumers. The current logrolling circus should provide enough evidence that politicians can put tremendous pressure on regulators to protect consumers and business interests in particular ways without concern for the larger consequences. If that regulator is the Fed and is also responsible for systemic regulation and monetary policy, we risk damaging one of the most important and independent institutions in our financial system.”
Forbes - “During 2009 seven states and the District of Columbia raised sales tax rates, with one jurisdiction–North Carolina–actually doing it twice. Only four states hiked rates in 2008 and only one in 2007. Given state budget problems, the 2009 state sales tax increases aren’t surprising. States have also been raising income tax rates on the wealthyand on corporations and boosting excise taxes on alcohol and tobacco. With states now facing record budget shortfalls, more tax increases seem likely.”
NYT – “Companies are quietly and gradually moving their pension funds out of stocks. They want to reduce their investment risk and are buying more long-term bonds. But states and other bodies of government are seeking higher returns for their pension funds, to make up for ground lost in the last couple of years and to pay all the benefits promised to present and future retirees. Higher returns come with more risk.”
Forbes - “At its most basic level, the national debt simply consists of all the federal deficits in history minus budget surpluses. For fiscal year 2009, which ended last Sept. 30, this amount came to $7.5 trillion.
Obviously this is an astronomical sum. But it really tells us almost nothing unless we look at it in context. Economists generally look at the debt in relation to the nation’s total output of goods and services, which is the gross domestic product. The debt came to 53% of GDP last year, up from 40% the year before and 35% in 2000, but down from 109% at the end of World War…”
So Where’s Consumer Protection?
by jdebnam on March 9, 2010
in Fed Actions, Financial Crisis & Regulatory Actions, Systemic Risk
NYTimes - “Later this week, Christopher J. Dodd, chairman of the Senate Committee on Banking, Housing and Urban Affairs, is expected to finally unveil the Senate’s version of a financial reform bill.
It may address some of the big-ticket items that are supposed to avoid another financial fiasco on a global scale — like higher capital requirements for banks to reduce risk, some version of a resolution authority to wind down failing investments banks (like Lehman Brothers) and insurance giants (like A.I.G.), and perhaps a say-on-pay plan.”