The house issued a bill Friday governing Wall Street, the largest alteration of laws geared towards banks and other financial institutions since the New Deal. Senate action is coming early next year.
Some concerns and responses on the bill:
Q. Who should be concerned?
A. Financial institutions, both banks and nonbanks; householders, insurance companies; hedge funds; payday lenderstraders in complex derivatives; and securities rating companies.
And consumers such as credit card holders, and borrowers.
Q. How would it retain another Wall Street crash?
A. It creates a Financial Services Oversight Council controlled by the Treasury secretary, the Federal Reserve chairman and heads of regulatory agencies. The council should then watch the loan market to help protect the financial system. It would discover firms and actions that should be subject to enhanced criteria, including limits on the amount they can loan. Companies would be required to project for their own death, detailing how they would be broken apart if they fail. The government will have rights to remove stronger firms if they are considered a strong hazard to the economy.
Q. Who is liable for a failing firm?
A. Failing banks are dissolved now by the Federal Deposit Insurance Corp. The bill issues that nonbank institutions that fail first be paid by shareholders and creditors. Even secured creditors will have to pay, losing as much as 25% of their security. To stop the tidal wave effect, the FDIC will have rights to a $150 billion account created by institutions with more then $20 billion in assets, or hedge funds with at least $10 billion in assets.
Q. What effect might this hold on the consumer?
A. The bill issues a Consumer Finance Protection Agency whom will keep an eye on - credit cards, payday loans and terms on savings accounts. It would take consumer standardization and enforcement abilities away from bank regulators. Under current law, states cannot pull authority over federal consumer laws, but the legislation would allow states in certain situations to allow tougher consumer laws on financial instituions. Banks could dodge state laws by pretending they "materially" impair the occupation of banking. Several industries would be free from CFPA supervising, including retailers, automobile dealers, attorneys and accountants.
Q. Is that all?
A. It brings the unregulated $600 trillion derivatives market under government oversight. Derivatives are complicated financial tools, such as credit default swaps, whom are blamed for the wall street frenzy from last year. Some companies that use them to skirt against danger from new demands in the overhaul legislation would get elisions. So would companies considered too small to pose a risk to the financial system. The Obama administration did not want the exceptions, and consumer counsels say they give Wall Street a pardon. Hedge funds, which operated in shadow financial markets, would be forced to be certified with the government.
Q. Did you forget about those giant executive salareis?
Source : Payday Loan Market Shook Up
A. Company shareowners would get a nonbinding right to vote on the annual income of top administrators. Federal banking regulators would have to O.K. compensation practices, though not real pay, at banks and bank holding companies.
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Some concerns and responses on the bill:
Q. Who should be concerned?
A. Financial institutions, both banks and nonbanks; householders, insurance companies; hedge funds; payday lenderstraders in complex derivatives; and securities rating companies.
And consumers such as credit card holders, and borrowers.
Q. How would it retain another Wall Street crash?
A. It creates a Financial Services Oversight Council controlled by the Treasury secretary, the Federal Reserve chairman and heads of regulatory agencies. The council should then watch the loan market to help protect the financial system. It would discover firms and actions that should be subject to enhanced criteria, including limits on the amount they can loan. Companies would be required to project for their own death, detailing how they would be broken apart if they fail. The government will have rights to remove stronger firms if they are considered a strong hazard to the economy.
Q. Who is liable for a failing firm?
A. Failing banks are dissolved now by the Federal Deposit Insurance Corp. The bill issues that nonbank institutions that fail first be paid by shareholders and creditors. Even secured creditors will have to pay, losing as much as 25% of their security. To stop the tidal wave effect, the FDIC will have rights to a $150 billion account created by institutions with more then $20 billion in assets, or hedge funds with at least $10 billion in assets.
Q. What effect might this hold on the consumer?
A. The bill issues a Consumer Finance Protection Agency whom will keep an eye on - credit cards, payday loans and terms on savings accounts. It would take consumer standardization and enforcement abilities away from bank regulators. Under current law, states cannot pull authority over federal consumer laws, but the legislation would allow states in certain situations to allow tougher consumer laws on financial instituions. Banks could dodge state laws by pretending they "materially" impair the occupation of banking. Several industries would be free from CFPA supervising, including retailers, automobile dealers, attorneys and accountants.
Q. Is that all?
A. It brings the unregulated $600 trillion derivatives market under government oversight. Derivatives are complicated financial tools, such as credit default swaps, whom are blamed for the wall street frenzy from last year. Some companies that use them to skirt against danger from new demands in the overhaul legislation would get elisions. So would companies considered too small to pose a risk to the financial system. The Obama administration did not want the exceptions, and consumer counsels say they give Wall Street a pardon. Hedge funds, which operated in shadow financial markets, would be forced to be certified with the government.
Q. Did you forget about those giant executive salareis?
Source : Payday Loan Market Shook Up
A. Company shareowners would get a nonbinding right to vote on the annual income of top administrators. Federal banking regulators would have to O.K. compensation practices, though not real pay, at banks and bank holding companies.
Title Pawn Site
