| On December 11th, 2009 the U.S. House of | | | | regulations should be adopted. Most importantly, the |
| Representatives passed legislation could rewrite the | | | | bill also gives the council the power to dismantle large, |
| rules governing financial markets and dramatically | | | | troubled firms whose collapse could endanger the |
| curtail the power of the Federal Reserve. If enacted, | | | | entire financial system. |
| this proposed legislation would bring about the biggest | | | | Passing the U.S. House of Representatives by a vote |
| changes to our financial system since the Great | | | | of 223-202 with no Republican votes and 27 |
| Depression. | | | | democrats opposed, the bill must overcome many |
| The 1,279 page bill would create the Consumer | | | | hurdles before being signed into law. Republican |
| Financial Protection Agency (CFPA) to oversee | | | | leaders argue that the regulations institutionalize |
| consumer protection initiatives. This agency would be | | | | bailouts and hinder business practices due to an |
| given the responsibility of monitoring many of the | | | | overreaching of government powers and the weight |
| financial products available directly to consumers | | | | of additional bureaucracy. They also feel that the |
| including most loans and credit cards. The agency | | | | current legislation will not resolve many of the |
| would also tackle consumer awareness, financial | | | | problems that led to the current financial crisis. |
| literacy education and credit card dispute arbitration. | | | | Before this new legislation can become a reality it will |
| However, due to amendments added to facilitate the | | | | have to undergo rigorous scrutiny within the Senate. |
| bill's passage, financing from automobile dealers and | | | | In fact the Senate Banking Committee is now |
| credit-related insurance products would fall outside | | | | considering a bill that is considerably different than |
| the CFPA's jurisdiction. | | | | the House version and the Obama administration's |
| The proposed legislation will also set up a Financial | | | | original vision. The bill would completely revamp the |
| Services Oversight Council to monitor large-scale | | | | existing regulatory structure and create entirely new |
| financial risks, initiate regulation of the vast | | | | regulatory agencies with unprecedented powers. |
| derivatives market and monitor institutions considered | | | | If the Senate legislation should survive a final vote |
| "too big to fail". This council will be comprised of the | | | | (expected in the first quarter of 2010), the two |
| Treasury Secretary, the Federal Reserve Chairman | | | | proposals would need to be reconciled, again creating |
| and heads of various financial regulatory agencies. | | | | the possibility for additions, cuts and a host of other |
| This group's primary responsibility will be to monitor | | | | last-minute wrangling. It is likely that the final version |
| the nation's financial markets for potential threats and | | | | of financial reform legislation will look very different |
| to identify firms and activities where additional | | | | from the current proposals. |