The House Financial Services Committee is sending a massive Wall Street reform bill to the House floor next week: “The Wall Street Reform and Consumer Protection Act of 2009” (here’s a link to a PDF of the bill).
The bill is a bundle of the different pieces of reform that were passed separately out of committee. The six major pieces and pertinent subsections are:
- Financial Stability Improvement Act
- The Financial Services Oversight Council
- Prudential Regulation of Companies and Activities for Financial
Stability Purposes - Improvements to Supervision and Regulation of Federal
Depository Institutions - Further Improvements to the Regulation of Bank Holding
Companies and Depository Institutions - Improvements to the Federal Deposit Insurance Fund
- Improvements to the Asset-backed Securitization Process
- Enhanced Dissolution Authority
- Additional Improvements for Financial Crisis Management
- Corporate and Financial Institution Compensation Act
- Over-the-Counter Derivatives Markets Act
- Consumer Financial Protection Agency Act
- Private Fund Investment Advisers Registration Act
- Accountability and Transparency in Rating Agencies Act
- Investor Protection Act
- Federal Insurance Office
Here is the Democrats summary of the bill.
I offered a review of these ideas and the potential benefits and negatives of what has been proposed in my review of the Obama plan. In general, this bill as it is now would do more harm than good. There are good provisions in here, like breaking the rating agency oligarchy. But the CFPA and Financial Stability legislation is only going to hurt small businesses, create moral hazard, reduce competition, and codify too big to fail.