US Senate Committee On Banking, Housing & Urban Affairs

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Joseph Robidoux III
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US Senate Committee On Banking, Housing & Urban Affairs

#1

Post by Joseph Robidoux III » Thu Feb 14, 2013 8:05 pm

Senator Warren's first day on the [/break1]banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=84abcfc3-9dd8-49ec-b5c0-2f75c618f075]Banking Committee.Sen. Elizabeth Warren (D-Mass.) opened her first hearing on the Senate Banking Committee with a bang, pressuring regulators to take financial institutions found to have violated the law to trial. The new senator quickly reassumed her mantle as a fierce Wall Street critic, pushing regulators at a Thursday hearing on the Dodd-Frank financial reform law to acknowledge they could not remember the last time they had taken banks to trial for misbehavior."The question I want to ask is how tough you are," Warren said to witnesses testifying on Thursday. "Tell me a little bit about the last few times you've taken the biggest financial institutions on Wall Street all the way to trial."Thomas Curry of the Office of the Comptroller of the Currency and Elisse Walter, chairman of the Securities and Exchange Commission (SEC), both touted the settlements and consent orders they have secured from financial institutions but could not name the last time they took a big bank to trial.[/break1]com/blogs/on-the-money/banking-financial-institutions/283181-warren-challenges-regulators-to-take-more-banks-to-trial]http://thehill.com/blogs/on-the-money/b ... s-to-trialGonna be some changes here boys...



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US Senate Committee On Banking, Housing & Urban Affairs

#2

Post by dbear » Fri Feb 15, 2013 3:43 pm

I hope so.



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Re: US Senate Committee On Banking, Housing & Urban Affairs

#3

Post by Addie » Wed Nov 15, 2017 12:18 pm

Mother Jones - Hannah Levintova
The Senate is Getting Ready to Erode Obama’s Landmark Wall Street Law

And the GOP’s plan is probably going to work thanks to a group of moderate Democrats.

On Monday, the Senate Banking Committee announced that it struck a rare bipartisan deal to deregulate banks. The deal would gut several of the protections enacted in 2010 in response to the financial crisis as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act, most notably a key rule requiring that “Too Big To Fail” banks—those with more than $50 billion in assets—undergo stricter oversight. The deal is backed by nine Democrats, which means that if the full Republican caucus backs the bill it would have enough votes to overcome a filibuster.

The plan, which was led by Committee Chairman Sen. Mike Crapo (R-Idaho), would quintuple the threshold for a “systemically important” designation by the federal government, raising that figure from $50 billion in assets to $250 billion. The result? Several dozen major banks and financial institutions—including BB&T, American Express, Credit Suisse, Regions Financial, Citizens Financial, and SunTrust—would no longer be subject to the most rigorous risk checks enacted in 2010 to monitor big banks’ ability to withstand financial shock. These checks include annual stress tests by the Federal Reserve, as well as higher capital ratio requirements. The total number of financial institutions subject to this highest level of supervision would drop from 40 to about 12. This same deregulation was proposed this summer by Treasury Secretary Steven Mnuchin, an alum of Goldman Sachs, and a number of the banks that would be excluded have failed stress tests in the past.

This plan, Crapo said, is currently being drafted into a piece of formal legislation that could be released as early as this week. On Monday, the banking committee released a summary of the other deregulatory measures in the plan. These include:
Loosening restrictions on the ability of banks with less than $10 billion in assets to sell high-risk mortgages.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#4

Post by Addie » Tue Nov 21, 2017 9:38 am

TAP - Nov 15 2017
Testing Progressives, Centrist Dems Team Up with GOP to Deregulate Banks ...

Alas, the congressional Democrats’ spine couldn’t stay stiff forever. So what’s the straw that broke the party’s back?

Wall Street, of course.

On Monday, news broke that Senate Banking Committee Chair Mike Crapo had struck a deal with a cadre of Wall Street friendly Senate Democrats to roll back regulations, including key parts of Dodd-Frank, on a large segment of the banking industry under the guise of providing new consumer protections and relief for struggling community banks.

The bloc of Democrats went around their own Democratic ranking committee member, Ohio Senator Sherrod Brown, who walked away from talks with Crapo weeks ago after he said it became clear that any sort of bipartisan deal would be dramatically skewed toward banks, not consumers.

Eight Senate Democrats and independent Maine Senator Angus King, who caucuses with the Democrats, have signed on to the deal with Crapo. They include four members of the banking committee—John Tester from Montana, Joe Donnelly from Indiana, Heidi Heitkamp from North Dakota, and Mark Warner from Virginia—as well as former Democratic vice presidential candidate Tim Kaine of Virginia, Claire McCaskill of Missouri, Joe Manchin of West Virginia, and Gary Peters of Michigan.

The bill would make it easier for “smaller” banks to sell high-risk mortgages, remove reporting requirements and certain capital standards, and free them of the Volcker rule that creates a wall between a bank’s investment activities and regular depositor banking. The biggest change, though, is that it would substantially lift the threshold for what is considered under Dodd-Frank to be a “systemically important financial institution,” from $50 billion to $250 billion. This would release dozens of financial behemoths, including American Express, SunTrust, and BB&T, from additional Federal Reserve monitoring and more substantial capital requirements. As critics of the legislation warn, the bill would thereby allow a larger swath of the banking industry to engage in the type of risky behavior that led to the economic disaster of the late 2000s.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#5

Post by Tiredretiredlawyer » Tue Nov 21, 2017 10:50 am

Claire McCaskill? Tim Kaine? Whaaa.......? :confused:


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#6

Post by RTH10260 » Tue Nov 21, 2017 12:30 pm

Addie wrote:
Tue Nov 21, 2017 9:38 am
TAP - Nov 15 2017
Testing Progressives, Centrist Dems Team Up with GOP to Deregulate Banks ...
:snippity:
The bill would make it easier for “smaller” banks to sell high-risk mortgages, remove reporting requirements and certain capital standards, and free them of the Volcker rule that creates a wall between a bank’s investment activities and regular depositor banking. The biggest change, though, is that it would substantially lift the threshold for what is considered under Dodd-Frank to be a “systemically important financial institution,” from $50 billion to $250 billion. This would release dozens of financial behemoths, including American Express, SunTrust, and BB&T, from additional Federal Reserve monitoring and more substantial capital requirements. As critics of the legislation warn, the bill would thereby allow a larger swath of the banking industry to engage in the type of risky behavior that led to the economic disaster of the late 2000s.
Exactly the banking segment that has the least power to withstand a next collapse. Nice fodder for the big Wall Street banks to take over when the wind changes only slightly.



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Re: US Senate Committee On Banking, Housing & Urban Affairs

#7

Post by Addie » Wed Nov 22, 2017 11:59 am

Politico
Democrats split over support for GOP-led bank bill

A Republican-led proposal to roll back banking regulations is drawing support across party lines in the Senate, building momentum for the biggest rewrite of financial rules in years and setting the stage for a showdown among Democrats.

In an unusual development, nine Democrats — enough needed to pass the bill with Republicans in the months to come — are co-sponsoring the package, which would scale back rules for many banks.

The legislation was negotiated by Senate Banking Chairman Mike Crapo (R-Idaho) with a group of red-state Democrats who have been working for years to ease regulations that they say are stifling lending.

They are pushing ahead despite opposition from liberal lawmakers, including two prominent finance industry critics — Sen. Sherrod Brown of Ohio, the top Democrat on the Banking Committee, and Sen. Elizabeth Warren of Massachusetts, who has attracted a massive following by attacking Wall Street. Brown and Warren argue that the proposed regulatory rollbacks go too far. ...

The debate is exposing philosophical differences in the Democratic Party as it struggles to define itself on economic issues in the wake of last year's stunning electoral defeat.

For years, Senate Democrats have maintained a nearly impenetrable wall against efforts by the banking industry and Republicans to roll back sweeping financial regulations that President Barack Obama signed into law in 2010.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#8

Post by Addie » Tue Mar 06, 2018 9:57 am

Politico
Victory in sight for Democrats defying Warren on bank bill

Republicans and Democrats in the Senate are poised to pass a bill this week that would relax key banking regulations, steamrolling opposition from outspoken liberals like Sen. Elizabeth Warren who have built their careers calling for tougher oversight of Wall Street.

A core group of moderate Democrats is brushing off an escalating opposition campaign by the Massachusetts senator and other progressives like Sen. Sherrod Brown of Ohio, instead joining with GOP colleagues to reverse restrictions on large and small banks that were enacted in the wake of the 2008 financial meltdown.

For the bill’s supporters, the legislation is a chance to show voters that it’s still possible to get things done in an often paralyzed Congress. They include at least 12 Democrats, several of whom face tough reelection campaigns in states that President Donald Trump won in 2016. ...

As supporters work to attract even more votes from Democrats, they argue that the bill would right-size post-crisis rules imposed on small and regional lenders and help make it easier for them to provide credit. ...

The bill marks the biggest legislative change to banking industry oversight since Democrats enacted the Dodd-Frank Act, the historic 2010 law that imposed reams of new rules on lenders after the global financial crisis. The first procedural vote on the bill is scheduled for Tuesday.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#9

Post by Addie » Tue Mar 06, 2018 5:54 pm

New York Times OpEd
Why Are Democrats Helping Trump Dismantle Dodd-Frank? ...

Why would some Democrats provide support for a rollback of Dodd-Frank? Proponents argue that this bill provides much needed relief for community banks and credit unions, which, these proponents claim, face enormous difficulties. They also say that it doesn’t endanger financial reforms aimed against the largest and most dangerous players.

But that view is mistaken: This bill goes far beyond the health of community banks and credit unions. It removes protections for 25 of the top 38 banks; weakens regulations on the biggest players and encourages them to manipulate regulations for their benefit; and saps consumer protections.

What do Democrats get in return? Nothing substantive that they should want. They could demand better funding for regulators or an appointment to the Consumer Financial Protection Bureau — or a vote on gun control.

The Crapo proposal would relax important regulations for major banks. Though often described as medium in size, these banks are still very large. Dodd-Frank introduces regulations for banks with assets of more than $50 billion, regulations that increase in strictness as the banks get larger and riskier. This ensures that they have enough cash to survive a crisis, quality equity to manage problems and a living-will plan for how they can fail without bringing down the economy.

This regulation affects the 38 largest banks. By comparison, the more than 5,000 community banks in our country generally have $1 billion dollars in assets or less.

The bill would move that line up to $250 billion. This would exempt 25 of the largest banks, which in total account for $3.5 trillion, or 16 percent of total banking assets. Authors of the bill argue that the regulators could still enforce tighter rules on some of these banks. But history tells us they won’t until it is too late.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#10

Post by Addie » Wed Mar 07, 2018 12:31 pm

Mother Jones
Elizabeth Warren Blasts Fellow Democrats for Supporting a Massive Bank Deregulation Bill

The US Senate on Tuesday cleared a key procedural hurdle needed to move forward with a major bank deregulation bill that could pass the chamber in the coming days. If it becomes law, the bill would significantly loosen Wall Street regulations that were put in place by the landmark 2010 Dodd-Frank legislation following the financial crisis.

“This bill wouldn’t be on the path to becoming law without the support of these Democrats.”

One of the major changes proposed in the bill is a provision that would shrink the number of big banks that, under Dodd-Frank, are subject to additional scrutiny designed to assess their ability to withstand financial shocks—in essence, extra checks to determine how likely the banks are to fail or to require a government rescue with public dollars. Currently, banks with at least $50 billion in assets are subject to the additional supervision. The Senate bill would quintuple that threshold, meaning that banks would not receive added scrutiny if they have less than $250 billion in assets. The Congressional Budget Office released an analysis on Tuesday warning that such a change could have serious consequences. The bill, notes the CBO, would “increase the likelihood that a large financial firm with assets of between $100 billion and $250 billion would fail.”

If this threshold change becomes law, several dozen major banks and financial institutions—including BB&T, American Express, Credit Suisse, Regions Financial, Citizens Financial, and SunTrust—would no longer be subject to the most rigorous checks, and the total number of financial institutions under the highest level of oversight would drop from 40 to about 12. Additionally, the CBO found that the bill would grow the deficit by at least $671 million between 2019 and 2027, and would slightly increase the possibility of another financial crisis.

Despite this CBO analysis, the bill appears to be on course to sail through the Senate, in part because it has garnered support from a sizable number of Democrats. On Tuesday, Sen. Elizabeth Warren (D-Mass.)—one of the original champions of Dodd-Frank—criticized Democrats who voted to advance the current bill. “This bill wouldn’t be on the path to becoming law without the support of these Democrats,” she wrote on Twitter. “The Senate just voted to increase the chances your money will be used to bail out big banks again.”
Adding:
Vox: The bank deregulation bill in the Senate, explained

Instead of acting on immigration or guns, the Senate is about to vote on bank deregulation.
Politico: Warren at war with fellow Dems

Tempers are flaring as Democrats fight over legislation to loosen financial regulations.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#11

Post by Addie » Sat Mar 10, 2018 5:04 pm

The Hill
House Republicans warming to Senate deal on Dodd-Frank

House Republicans are warming up to a Senate bill that would loosen the banking rules put in place after the financial crisis.

The Senate is poised this week to pass the most significant changes to the Dodd-Frank Act since it became law in 2010. The bill has the support of more than a dozen Democrats, making it one of the few measures with a chance to become law this year.

With the GOP searching for accomplishments to tout ahead of the midterm elections, House conservatives who once derided the Senate bill are taking a second look, suggesting they may be open to compromise. ...

The Senate bill, introduced by Senate Banking Committee Chairman Mike Crapo (R-Idaho), would exempt roughly two dozen banks from stricter Federal Reserve oversight and a slew of smaller firms from lending and mortgage disclosure rules. It’s backed by a bipartisan coalition, including a filibuster-proof buffer of 13 Democrats.

“This is not the last chance for changes, but if this does not pass, it cements Dodd-Frank as is for the foreseeable future,” said a banking lobbyist backing the bill.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#12

Post by Addie » Mon Mar 12, 2018 9:31 am

New York Mag
The Democratic Party Is Moving Left – Except When You’re Not Looking ...

By all appearances, the Democratic Establishment has finally concluded that a “stopped-clock socialist” is right a couple times a century – and that their party’s path out of the wilderness cuts away from Wall Street and toward the left.

Or, so it appeared until last week – when more than a dozen members of the Senate Democrats voted to advance a bill that would make it easier for banks to discriminate against black people, coerce mobile-home buyers into predatory loans, and pursue high-risk lending strategies that increase the likelihood of a future financial crisis.

You can pursue more thorough accounts of the legislation’s toxic flaws here and here. But the upshot is simple: In the name of providing regulatory relief to “community banks,” the bill empowers small lenders to abuse consumers; liberates medium-size banks (including ones large enough to have required bailouts ten years ago) from the heightened regulatory scrutiny that Congress had put on them after the 2008 crisis; and provides the nation’s largest banks with various loopholes that will make it easier for them to take bigger risks and evade regulatory oversight.

For these reasons, among others, the Congressional Budget Office has concluded that the bill would significantly increase the odds of taxpayers having to bail out a failed bank in the near-future.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#13

Post by Addie » Wed Mar 14, 2018 7:07 pm

WaPo
Senate passes rollback of Dodd-Frank banking rules put in place after 2008 financial crisis

The Senate on Wednesday passed the most significant loosening of financial regulations since the economic crisis a decade ago, delivering wide bipartisan support for weakening banking rules despite bitter divisions among Democrats.

The bill, which passed 67 votes to 31, would free more than two dozen banks from the toughest regulatory scrutiny put in place after the 2008 global financial crisis. Despite President Trump’s promise to do a “big number” on the Dodd-Frank Act of 2010, the new measure leaves key aspects of the earlier law in place. Nonetheless, it amounts to a sweeping rollback of banking rules aimed at protecting taxpayers from another financial crisis and future bailouts.

Given the bipartisan support for the bill, Wednesday’s passage was expected. But for the first time since Trump became president, the divisions lurking within the Senate Democratic Caucus burst into full view, with Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio) leading vehement opposition to the bill, even as supporters — including Democrats up for reelection in states Trump won — supported it with equal vigor.

Warren and Brown argued the bill amounts to a gift to Wall Street that increases taxpayer risk while boosting the chances of another financial crisis. Supporters of the legislation — including endangered Democratic Sens. Heidi Heitkamp (N.D.,), Joe Donnelly (Ind.), and Jon Tester (Mont.) — disputed that characterization, contending that the bill’s aim is to loosen onerous regulations on local banks and credit unions, freeing them to focus more on community lending, particularly in rural states.
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Re: US Senate Committee On Banking, Housing & Urban Affairs

#14

Post by Addie » Thu Mar 15, 2018 12:04 pm

Politico
Congress rides to the rescue of thriving bankers

Banks have hauled in record profits for the last three years, according to data they report to the FDIC.

President Donald Trump and other supporters of the major banking bill that cleared the Senate on Wednesday say they want to rescue the nation’s lenders from a crush of regulations.

But far from being crushed, the industry looks more like it's booming.

Banks have hauled in record profits for the last three years and will be among the biggest winners under the new tax-reform law. Their loans are growing by 4 to 5 percent a year, well within historical norms. And even community banks, which the bill’s backers say they’re most concerned about, are making money.

Despite these signs of flourishing health, the deregulation bill passed the Senate in a 67-31 vote that included 16 Democrats and an independent, Angus King of Maine. The House will now take up the legislation. But critics of the bill say the facts undermine the case for rolling back key parts of the Dodd-Frank Act, the landmark law aimed at preventing a repeat of the 2008 financial crisis.

“I don’t see the real-world problem [the bill] is trying to solve, except the problem of bankers’ not making enough money,” said Marcus Stanley, policy director at Americans for Financial Reform, who is among progressives warning that the bill poses potential risks to the financial system.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#15

Post by Addie » Fri Mar 16, 2018 7:23 pm

WaPo Op-Ed - Sen. Michael F. Bennett (D-CO)
No, Congress isn’t gutting Dodd-Frank ...

The compromise that the Senate passed this week does not undermine Dodd-Frank. It preserves the Consumer Financial Protection Bureau. It maintains oversight of derivatives trading. It preserves resolution authority, which allows the government to dismantle large, failing banks to minimize risk to the economy. Just as before, big banks can no longer expect taxpayers to bail them out for reckless decisions. These were, and remain, the essential components of Dodd-Frank.

If you believe the critics, this compromise guts Wall Street reform. The facts say otherwise. It is a terrible irony of the Great Recession that the largest banks have become even larger. This bipartisan agreement leaves the largest banks as they are with regard to Dodd-Frank and provides much-needed relief to smaller banks and their customers. It is no coincidence that the bill’s Democratic sponsors come not from major financial hubs, but rural areas where small banks provide a disproportionate share of loans.

The Senate agreement is not without flaws, but it locks in the essential features of Wall Street reform. With these modifications in place and reasonable adjustments made to smaller bank rules, Republicans will no longer be able to use the plight of community banks and small businesses to justify an effort to attack the broader law. Now it’s up to the House to take up this bipartisan compromise, which it should pass without changes.

As we move forward, Democrats should consider two questions: One, are we going to fight for regulations that don’t accomplish their stated purposes? Two, are we going to let political hyperbole keep us from addressing the legitimate concerns of small businesses, community banks and millions of creditworthy Americans?


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#16

Post by Addie » Sun Mar 25, 2018 11:18 am

The Hill
Frustration mounts as Dodd-Frank rollback stalls

Banks and credit unions desperate for regulatory relief are ramping up pressure on House Republicans to quickly pass a bill easing Dodd-Frank banking rules.

The Senate earlier this month cleared a bipartisan bill that would exempt dozens of lenders from stricter federal oversight, sending it to the House.

The measure is a longtime goal of Republicans and the financial services industry. But Speaker Paul Ryan (R-Wis.) is keeping the bill off the House floor until senators agree to add on a slew of banking reforms that have passed the lower chamber.

Senators are resisting any changes to the bill, arguing that their bill is the result of hard fought negotiations, and the best chance for sweeping bipartisan reform of Dodd-Frank.

The deadlock has lobbyists for the banking industry and credit unions growing increasingly frustrated with the House. They plan to raise pressure during the two-week Easter recess for the House to take up the bill.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#17

Post by Addie » Wed Apr 11, 2018 5:59 pm

Cross-posting

Vanity Fair
Mick Mulvaney Buries Elizabeth Warren’s Dreams in a Shallow Grave

The C.F.P.B.’s acting director isn’t even pretending to protect consumers.


Until 135 days ago, the mission of the Consumer Financial Protection Bureau was pretty straightforward: to protect consumers from abuses in the financial sector. With jurisdiction over payday lenders, banks, credit unions, debt collectors, mortgage-servicing operations, and other companies within the U.S., one of the most important and effective tools in the C.F.P.B.’s arsenal was enforcement actions, wherein the bureau would fine bad actors and return money to consumers who’d been ripped off. Under Obama-era director Richard Cordray, the agency issued an average of two to four enforcement actions per month, ultimately returning $3.97 billion in cash to American consumers, plus an additional $7.93 billion through things like lower loan balances or debt relief. In one instance, Bank of America was forced to return $727 million to consumers over deceptive credit card practices; smaller enforcement actions aided victims of debt collection, student borrowers, and bank customers. By C.F.P.B.’s estimate, roughly 1 in 10 Americans have received some kind of reimbursement or other type of redress since the bureau was created. But since Cordray resigned and Donald Trump installed Mick “Some of us would like to get rid of the C.F.P.B.” Mulvaney in his place, things have changed ever so slightly. Instead of two to four enforcement actions each month, the C.F.P.B. is now issuing none—as in zero, nothing, nil, nada, zilch, zip, not one, not two, but diddly-freaking-squat.

According to a report by the Associated Press, a Freedom of Information request shows the bureau has literally not issued a single enforcement action since the Trump administration took it over 135 days ago. To be fair, no one was laboring under the assumption that Mulvaney, who as a South Carolina representative called the C.F.P.B. a “sick, sad joke” and co-sponsored legislation to get rid of it, would run the place in the same manner as his predecessor. In ole Mick’s few short months there, he’s already eased restrictions on loan sharks; pulled back from an investigation into a data breach that affected nearly half of all Americans; and told Senator Elizabeth Warren, who came up with the idea for the C.F.P.B. in the first place, to zip it and let him take a hacksaw to the agency in peace. But one assumed that Mulvaney would issue an enforcement action or two, if only to stave off the impression that he’s completely controlled by the financial industry. However, such is not the case!

In a statement, the C.F.P.B. claimed the slowdown is due to a new administration taking over, saying, “it is our job to enforce the law, and we take it very seriously.” (Incidentally, the bureau’s work continued without interruption for Trump’s first 11 months in office.) As the A.P. notes, “this is the longest stretch without enforcement actions in the C.F.P.B.’s history.” Lauren Saunders, associate director at the National Consumer Law Center, told reporter Ken Sweet that enforcement is “one of the most important parts of C.F.P.B., because of the signals it is able to send to markets . . . If a company violates the law, it needs to be held accountable and called out.”

Senator Warren has yet to issue a statement on Mulvaney’s record of zero enforcements, but there’s a chance she’s saving up her best material for later this week, when the acting director will appear for a two-day hearing before Congress. In January, the senator from Massachusetts told the Hive it was clear Mulvaney was “more interested in doing the bidding of big banks than standing up for American families,” adding that she found the turn of events at her brainchild agency to be “disgraceful.” Presumably, ole Mick can expect a similar verbal disemboweling come Wednesday.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#18

Post by Addie » Sun Apr 29, 2018 8:25 am

The New Yorker
The Dangers of Undoing Dodd-Frank

We are fast approaching the tenth anniversary of the worst financial crisis since the Great Depression. What passes for the official date is September 15th, the day that Lehman Brothers collapsed, but the crisis was under way months earlier, and the commemorative reëvaluations have already begun in the business press. The obvious question to ask is whether the financial markets, which have risen for most of the past decade but have been alarmingly shaky of late, could crash again. The answer largely depends on whether the Trump Administration undoes the best protection that we have against such an event: the Dodd-Frank law, which was passed in 2010, in response to the crash, after thirty years of financial deregulation.

In the early days of the New Deal, the federal government set up an elaborate array of controls over the financial system. For half a century before that, the system crashed regularly; for half a century afterward, it didn’t crash at all. Effective precautions created the illusion that they were not necessary, and, little by little, the government drastically scaled back what Democrats as well as Republicans had come to view as an outmoded set of constraints on banks’ size, scope, and assumption of risk. Conventional wisdom is a powerful force. Even on the verge of the 2008 crisis, almost no one believed that a collapse of the entire system was possible. Dodd-Frank, by placing unregulated new markets under government supervision and by requiring big banks to behave less riskily, reversed the swing of the pendulum.

By no means, though, has the potential for crisis passed. Moreover, if anything were to go wrong now, it would do so under an unstable and ill-informed head of state at a moment of political uncertainty, making the problem much more difficult to manage. The markets have calmed—except when Donald Trump unsettles them with a tweet—and the banks are healthy, but some negative trends that have been building for decades, and destabilizing politics, have worsened: income inequality, large regional variations in the distribution of economic well-being, and the political system’s adoption of an excessive faith in markets. After the crash, banks received swift, substantial help from the government, while people who had lost their jobs and their houses were largely left to fend for themselves. The result was that some places—roughly speaking, the financial capitals—recovered much faster than others, helping to create a populist resentment that Trump exploited to win the Presidency. The same phenomenon drove the success of the Brexit referendum, in Britain, and Viktor Orbán’s three electoral victories, in Hungary.

In the United States, the immediate political response to the crash was predictable. Liberals blamed deregulation and lax supervision of the big banks. Conservatives blamed the growth of subprime mortgages. It’s a false apposition. Subprime mortgages, which were bundled and sold as glamorous new financial instruments, were poorly evaluated by private rating agencies, and fell outside the scope of the government’s securities regulators; they were bought and sold with borrowed money by banks that had become wildly incautious about speculating with their funds. Today, because of a wave of post-crash mergers, the biggest banks are even bigger than they were, and financial power is more concentrated than it has been in at least a century. So everything depends on how well the government regulates the handful of “too big to fail” institutions that sit atop the system.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#19

Post by Addie » Wed May 09, 2018 8:22 am

WaPo
Bill to roll back post-financial-crisis banking rules gets clear path to passage

The House will take up a Senate-passed bill rolling back banking regulations, breaking an impasse that imperiled passage of legislation that is backed by the White House, Republicans and some Democrats.

House Speaker Paul D. Ryan (R-Wis.) told reporters Tuesday that an agreement had been reached and that “we will be moving the Dodd-Frank bill” along with a companion package of legislation supported by House Financial Services Committee Chairman Jeb Hensarling (R-Tex.).

Hensarling had been pushing to amend the Senate version of the bill undoing or shrinking portions of the Dodd-Frank Act, the law passed in the wake of the financial crisis a decade ago. But the bipartisan coalition of senators that got the bill through the Senate — over the objections of liberals such as Sen. Elizabeth Warren (D-Mass.) — warned that changing their delicate compromise would end up killing the bill.

In the end Hensarling backed down, leaving the legislation a clear path to passage. It has moved through the Senate and appears to have plenty of support to pass the House. The House will vote on the Senate’s version of the bill unchanged and likely send it to President Trump for his signature.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#20

Post by Addie » Tue May 22, 2018 6:51 pm

Bloomberg Editorial
Lawmakers Officially Forget the Financial Crisis

The U.S. Congress might have just set a record for shortness of memory: Just 10 years after a crisis that nearly brought down the global financial system, it’s loosening the safeguards designed to prevent a repeat. Now it’s up to regulators — and specifically the Federal Reserve — to ensure that the backsliding doesn’t go too far.

Prodded by President Donald Trump to “do a big number” on the 2010 Dodd-Frank reform, the House and Senate have agreed on a bill, the Economic Growth, Regulatory Relief, and Consumer Protection Act. It’s not a major rollback, and it provides some welcome relief for community banks, but it does take aim at a crucial guarantor of financial resilience: the equity capital that allows banks to absorb losses in difficult times.

The bill eases capital requirements for “custodial” institutions such as State Street and Bank of New York Mellon. These are among the most systemically important because they facilitate other banks’ transactions. What’s more, it does this by complicating a key measure of capital, known as the leverage ratio, which is meant to be a simple supplement to more easily manipulated regulatory metrics.

The bill also frees regional banks with less than $250 billion in assets from company-run stress tests and from special Fed supervision. That threshold is too high: Many of those banks are large, and institutions in this category required billions of dollars in taxpayer support to get through the last crisis.

The changes could be viewed in a more positive light if the banks had plenty of capital. They don’t. Some barely squeaked by in the last round of stress tests, and the largest have as little as $6 in equity for each $100 in assets — not nearly enough to avoid distress in a severe crisis. The loosening is also poorly timed: risks in the financial system are mounting, and banks have been reducing their reserves against bad loans.


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#21

Post by Danraft » Tue May 22, 2018 11:06 pm

What precisely does that mean, "$6 of equity for every $100 in assets"?
Equity is Cash? Only cash?
Assets is Loans? Insurance policies? Investment portfolios?

I remember hearing not long ago that the banks had plenty of money, they just were not lending it out?

I've known some bookies (decades ago) and sure as heck had more than $6 in cash for $100 in bets. Riskier bets, granted, but since financial institutions and investment portfolios built on the Wallstreet Racetack are no longer separated, still bets.

And, given the huge tax breaks and how the very first use of that money has been "stock buy backs", which increases demand, which raises stock prices, which makes investment profits go up, which means more tax free (the previous tax rate minus the new) money which means more money for "buy backs".... This will have the effect of raising stock prices more, right?
So, what happens in 2023 when the cusp turns and the Baby Boomer portfolios start to be cashed out due to death and inheritance? These get bought up by he parent company as well? Or, stock prices start to go down?
What happens when "public" companies are almost entirely company owned? Do they start making riskier moves?
When the stock market tumbles in an industry, how does it recover?
And, if a particular bank is heavily invested in that industry, is it less resilient?


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Re: US Senate Committee On Banking, Housing & Urban Affairs

#22

Post by RTH10260 » Wed May 23, 2018 4:47 am

I very much hope that dotus will nevah evah get into the situation to recover a stranded economy. :cantlook: :brickwallsmall:



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Re: US Senate Committee On Banking, Housing & Urban Affairs

#23

Post by BBFlatt » Wed May 23, 2018 1:52 pm

Equity = Assets - Liabilities, iow how much skin the owners (shareholders) have in the game.



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Re: US Senate Committee On Banking, Housing & Urban Affairs

#24

Post by Addie » Wed Jul 18, 2018 10:49 am

CBC
Federal Reserve boss tells Congress to get its house in order: Don Pittis

Jerome Powell lets senators know it's their job, not his, to solve trade and employment problems


The world's most powerful central banker, U.S. Fed chair Jerome Powell, says strong inflation and low unemployment mean the country's economic boom is set to continue.

But when grilled yesterday by members of the Senate banking committee about the economic risks of trade wars and stagnating wages for the poorest Americans, he returned fire.

In wide-ranging testimony on the economy that went from the shocking effect of tariffs on agricultural prices to the impact of the opioid crisis on the workforce, Powell repeatedly pointed out what was within and outside the Federal Reserve's remit.

"These are unhealthy trends in the U.S. economy that we don't have the tools to fix," he said. "We don't have those tools. You have those tools." ...

But in his no-nonsense way, Powell made it quite clear where he stood on President Donald Trump's protectionist strategy.

"Countries that have remained open to trade, that haven't erected barriers including tariffs, have had higher incomes, higher productivity," he said. "And countries that have gone in a more protectionist direction have done worse."


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