Well, as much as Dodd was not as tough on banks as many would like, his lame duck status is turning Potemkin reforms into an utter joke.
The element of the proposed consumer financial protection agency that would have had a real impact on the predatory practices was the requirement to offer plain vanilla products. But nope, can’t have firms that enjoy extensive support by the state have their pillagingprofit seeking crimped in any way.
With Dodd on his way out, the consumer financial protection agency is likely to be folded into the Treasury, where it is certain to be neutered. The argument is that the operations of the to-be-created agency might conflict with those of the systemic risk regulator. Huh? First, I’d like to hear some hypothetical examples where the two might disagree. Seems to me safe retail products is pro-stability in the overwhelming majority of cases. Infrequent instances of friction between two agencies with distinct mandates is a pretty weak argument for neutering one of them. And if there were a bona fide tradeoff between consumer protection and stability, it might be salutary to have that conflict be explicit to force examination and debate.
To the news on Dodd, via the Wall Street Journal:
Senate Banking Committee Chairman Christopher Dodd is considering scrapping the idea of creating a Consumer Financial Protection Agency….
Mr. Dodd’s offer is conditional, however: Republicans must agree to create a beefed-up consumer-protection division within another federal agency…
Mr. Dodd’s shift comes amid a new sense of urgency to enact revamped rules governing the financial sector in what is now a narrow window before the November election.
Bipartisan support is believed necessary to pass such legislation, as Democrats aren’t likely to get the 60 Senate votes needed to overcome a potential Republican filibuster. With Mr. Dodd no longer seeking re-election, some of the pressure to apply a populist stamp on new financial regulations has eased.
Mr. Dodd’s openness brings him more in line with the top Republican on the Senate banking panel, Richard Shelby of Alabama, who has referred to the Consumer Financial Protection Agency as a “nanny state.”
Many in Washington and on Wall Street believe the chances of Congress reaching an agreement on financial regulations hinges on whether Messrs. Dodd and Shelby can work out a compromise, and staffs have been locked in intense negotiations for weeks.
Representatives of Messrs. Dodd and Shelby wouldn’t discuss the state of negotiations, other than to say no agreement has been reached.
Talks could fall apart, and Mr. Dodd could still decide to push for creation of an independent agency.
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Nearly every other country has decided that financial consumer protection is a good idea. Most have a varying degree of success and generally you don’t end up with plain vanilla offerings. What you do end up with is predatory small print being thrown out. I cannot help but think that consumer protection is being miss sold in the US because in general consumer protection actually helps the banks in many ways. In the same way that small print gets thrown out, so do liar loans with no proof of income. Proper financial consumer protection should work both ways to protect the user and to protect the bank. Yes it does cost the consumer and it limits credit availability but in the long run it promotes a healthier system. So the short term view prevails again and the US ends up with an inappropriate financial standards setter with conflicting objectives. Where is Elizabeth Warren when you need her?
http://www.huffingtonpost.com/elizabeth-warren/america-without-a-middle_b_377829.html
So this is why he decided to retire. One last sally into the breach for the religion of Capitalism. A fall onto his sword in a last noble sacrifice on behalf of his ventriloquists.
Yves-glad you picked up on this topic, which is of great importance.
Of course, it is the President who should be pushing this issue. It’s a winner politically. And as Brick says, ultimately it’s win-win for both sides of the transaction.
Makes ultimate sense in light of what’s next for Mr. Dood–a very cushy job, or speaking/consulting gigs–with one/some/most of the companies he’s refusing to regulate. This will up his fees considerably.
There were two ways this could go: (1) I don’t have to get reelected, so I can do something to rehabilitate my name with posterity and not worry about pissing off my wealthy owners; or, (2) looks like I need to get a new job, I’d better make certain that those who would hire me remember what I’ve done for them recently.
Looks like it’s going to be what’s behind door number two.
Ooook!
Here’s a guy that had a chance to retire on a very good note. But no: got to think about the trappings of the great life after, ahem, (cough! cough!) public service.
Hence, I apologize for being a tad testy, but I’m in no mood to be even remotely polite.
I have one question for Senator Dodd:
How much?
As in “How much did your future employer promised you (or your relatives/friends) in exchange to enjoy an unrestricted license to keep fucking the American people?”
I actually think you are being too polite
http://www.youtube.com/watch?v=Z4iysK9cp7M
Both Frank and Dodd, the Chairs of Congress’ Financial Services Committees, are whores for the financial industry.
If memory serves, Dodd’s father took part in Nuremberg but then had his reputation considerably tarnished later in some political/financial scandals. This was according to Dodd a formative experience for him and pushed him to restore the honor of the family name but what this really looks like is a case of “Like father, like son.”
From the father’s Thomas Dodd’s wiki:
“In 1967 Dodd became the first Senator censured by the US Senate since Joseph McCarthy in 1954, and was one of only six people censured by the Senate in the 20th century. The censure was a condemnation and finding that he had converted campaign funds to his personal accounts and spent the money. Beyond the Senate Ethics Committee’s formal disciplinary action, other sources (such as investigative journalist Drew Pearson and Jack Anderson’s Congress in Crisis) suggest Dodd’s corruption was far broader in scope, and there were accusations of alcoholism”
Did anyone actually expect anything from Chris Dodd? If so, why?
Dodd threatened a personal filibuster of the FISA Amendments Act in the Senate. This caused the vote on it to be delayed for a few weeks, but then when Reid moved on it again, Dodd’s filibuster (and much of my respect for him) just sort of evaporated away.
Dodd is retiring from the Senate. Where do retiring Senators go? Lobbying firms and lobbying law firms.
Can you say, “time to cash in my chips!”??
Pecora Weeps
http://dirtdiggersdigest.org/archives/1058
All about the difference between a tough prosecutor and the Angelides commission.
Dodd isn’t repeating the mistakes of his father, he demonstrating that he’s learned from them.
He’ll be transitioning to a highly-paid, do-nothing job somewhere in the banking industry before the paint is dry on his replacement’s Senate office.
Such a public servant!
The Consumer Financial Protection Agency will be controlled by the financial special interests or it will not be allowed to exist. Most of Congress Democrat or Republican, most of the Administration Democrat or Republican, are completely bought and paid for by the (FIRE) sector and other powerful lobbies . Anything that the House Committee on Financial Services, the Senate Committee on Banking, Housing, & Urban Affairs, introduce and pass that Obama doesn’t veto has already been approved by the special interests. This B.S. that main stream media is pushing, that the Congress and Administration are working hard to protect the economy for all Americans is just that, absolute B.S. They have to make it seem like these worthless politicians are actually doing their jobs for the people. The job they are really doing is what the FIRE sector lobbies and their future employers are paying them to do. The truth is main stream media puts out what they are directed to, and truth is not always part of the script. As for the American People, if they become a problem. Raise the Terror Threat Level off the scale. Take some minor issue blow it up completely out of proportion. Get the Chicken Little Syndrome going full tilt. Keep them busy so they don’t realize how bad they are being screwed. Basic Government USA 2010 sad but true.