CCH Financial Reform News Center

IMF Praises Dodd-Frank But Laments Failure to Streamline Regulation

By James Hamilton, J.D., LL.M., Principal Analyst, CCH Federal Securities Law Reporter; and CCH Derivatives Regulation Law Reporter.

While praising the overall financial reforms achieved by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the IMF lamented the Act’s failure to consolidate US financial regulation. Although the Act did eliminate the Office of Thrift Supervision, it left intact the OCC, FDIC, and the Fed with significant and overlapping oversight responsibilities. In a first report on the Dodd-Frank legislation, the IMF also noted that, since the SEC and CFTC have similar and converging market oversight and conduct-of-business missions, a merger of the two agencies would have properly addressed the seeming artificiality of the present separation between securities and futures oversight, as well as end the complexities of reporting to two separate Congressional oversight committees which, in the IMF’s view, has led to inefficiencies and jurisdictional disputes.

Republicans Introduce Bill to Enhance SEC Disclosure

This story appeared in Bank Digest.

Rep. Darrell Issa, R-Calif., Ranking Member of the Oversight and Government Reform Committee, has introduced a bill he says will repeal a part of the Dodd-Frank Wall Street Reform and Consumer Protection Act that allows the Securities and Exchange Commission to not disclose records or information that typically are subjects of Freedom of Information Act requests. H.R. 5924, the “SEC Freedom of Information Restoration Act,” would repeal Section 9291 of the Dodd-Frank Act and bring more transparency and accountability to the SEC, Issa said.

Housing Finance Hearing Planned

This story appeared in Bank Digest.

House Financial Services Committee Chairman Barney Frank, D-Mass., and Capital Markets, Insurance and Government Sponsored Enterprises Subcommittee Chairman Paul E. Kanjorski, D-Pa., have announced that the two bodies will continue a series of hearings on the future of housing finance in September. Kanjorski will conduct an oversight hearing of the GSEs, and the full committee will continue its examination of policy options for restructuring the housing finance system

Agencies Begin to Discuss Consumer Financial Protection Staff

This story appeared in Bank Digest.

The federal financial institution regulatory agencies have had the first meeting of the working group formed to transfer personnel and functions to the newly-created Bureau of Consumer Financial Protection. The initial meeting was attended by the Secretary of the Treasury and of the Department of Housing and Urban Development, and by the heads of the National Credit Union Administration, Federal Reserve Board, Federal Deposit Insurance Corp., Federal Trade Commission and Office of the Comptroller of the Currency.

Dodd-Frank Act Provision Regarding Oversight and Transparency Questioned

This story appeared in Bank Digest.

House Financial Services Committee Ranking Member Spencer Bachus, R-Ala., stated that Democrats must “fix a hidden provision” in the 2,300 page Dodd Frank Act that protects the failed regulators at the heart of the financial crisis by denying transparency and public oversight of the Securities and Exchange Commission. According to Bachus, “The provision in question, like many contained in the 2,300 page Dodd-Frank and in particular Title IX, was never the subject of discussion during the conference committee or an SEC oversight hearing, which have been woefully lacking since the Obama Administration came to power last year. The public has a right to know what the SEC has learned through its oversight of regulated entities and to analyze the SEC's conclusions, and it's up to the Democrats to make this right.”

Darrell Issa, R-Calif., Ranking Member of the House Oversight and Government Reform Committee, issued a statement asking the Obama Administration to explain the purpose of and how the American people will benefit from Section 929I of the Dodd-Frank Wall Street Reform and Consumer Protection Act that allows the SEC to not “disclose records or information” that are typically subjects of Freedom of Information Act (FOIA) requests.

Obama Administration Announces Conference on Housing Finance Reform

 This story appeared in Bank Digest.

The Obama administration announced expanded opportunities for public engagement on the future of our nation’s housing finance system, including Fannie Mae and Freddie Mac. These events, which will include a major conference on Aug. 17, 2010, in Washington, D.C., will help provide critical public input as the administration continues its work developing a comprehensive housing finance reform proposal for delivery to Congress by January 2011. The conference is expected to bring together leading academic experts, consumer and community organizations, industry groups, market participants and other stakeholders for an open discussion about housing finance reform. 

Committee on Oversight and Government Reform Republicans Question FCIC Spending

This story appeared in Bank Digest.

Ahead of the July 27, 2010, House vote to pass H.R. 4899, the War Supplement Appropriations Act, Committee on Oversight and Government Reform Republicans questioned the increase in funding for the Financial Crisis Inquiry Commission (FCIC) contained within the bill. The controversial provision will boost FCIC funding by 22 percent, or $1.8 million. In light of this additional funding provision that came at the request of the FCIC, Ranking Member Darrell Issa, R-Calif., sent a letter to FCIC Chairman Phil Angelides requesting “information that will help the public understand whether any additional expenditure of taxpayer money on the FCIC is warranted.” Republican criticism of the additional funds focused on the makeup of the members and staff of the FCIC. Republicans questioned whether current members have conflicts of interest arising from their prior roles in the public and private sectors, and, while acknowledging the need to hire additional members with expertise in financial markets, Republicans noted their concern that the FCIC has used up its original $8 million budget when many of its staffers come from, and are paid by, other government agencies.

Treasury Under Secretary Remarks Dodd-Frank Act Will Lead to Sounder Financial System

By: J. Preston Carter, J.D., LL.M., Editor, the CCH Federal Banking Law Reporter, CCH Financial Privacy Law Guide, CCH State Banking Law Reporter;and Bank Digest.

In remarks delivered at the Peterson Institute for International Economics on July 26, 2010, Treasury Under Secretary for International Affairs Lael Brainard noted that, in response to the most globally synchronized recession the world has seen, “we have mounted the most globally coordinated response the world has attempted.” However, he cautioned that decisive financial repair and reform are key to future economic growth and that “The historic enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act lays the foundations for a sounder and more resilient financial system.” Brainard also stated that transparency is needed for financial markets to function effectively, and he welcomed last week's release by the Committee of European Banking Supervisors of bank-by-bank stress test results.

Agreement Reached on Basel Committee Capital and Liquidity Reforms

By John M. Pachkowski, J.D., Editor, CCH Federal Banking Law Reporterand Bank Digest; Author, Anti-Money Laundering and Bank Secrecy: Compliance and the USA PATRIOT Act; Co-Author CCH Financial Privacy Law Guide.

The Group of Governors and Heads of Supervision, the oversight body of the Basel Committee on Banking Supervision, have reached “broad agreement,” during a July 26, 2010, meeting, on the overall design of the Basel Committee’s capital and liquidity reform package which is intended to increase the quality, quantity and international consistency of capital, to strengthen liquidity standards, to discourage excessive leverage and risk taking, and reduce procyclicality.

Schapiro Provides Overview of Reform Plans

This story appeared in SEC Today.

SEC Chair Mary Schapiro last week testified before the House Financial Services Subcommittee about recent and upcoming reform initiatives. In her prepared statement, Schapiro noted that the President’s proposed fiscal year 2011 SEC budget included a request for $24 million to begin its implementation of the financial reform legislation. The SEC is developing estimates of the resources it will need to achieve the full implementation of the reform measures, she said. Current estimates suggest that the SEC will need to add 800 new positions to carry out its new or expanded responsibilities. Schapiro’s prepared testimony is posted on the SEC’s Web site.