Who Do They Serve?
by digby
We’ve heard that Chris Dodd plan agrees to tank the proposal an independent Consumer protection Agency, but Mother Jones is the first to print it. Nick Bauman reports:
This is the document’s top-line summary:
Create a [Bureau of Financial Protection] inside of Treasury with a Presidentially-appointed director; a dedicated budget (through assessments on large banks, non-banks, and with the Fed making up the shortfall); autonomous rule-writing authority with the regulations to apply across-the-board to all entities offering financial services or products; and examination and enforcement authority for large banks and mortgage companies, small banks in a back-up capacity, and other non-banks on a risk basis, as described below. The independent agency proposal would be dropped.
As Andy explained Saturday afternoon, Dodd’s decision to move financial protection inside an existing agency is an effort to gain Republican votes for financial reform. But it’s unclear whether either of the Republicans Dodd has negotiated with to date—Sen. Richard Shelby (R-Al.) and Sen. Bob Corker (R-Tenn.)—will support the new plan. There hasn’t been any hint of GOP backing for the proposal in newspaper articles on Dodd’s leaked plan.
I doubt that this had anything to do with Republicans. They know they won’t get their support. This is who Dodd is serving:
Mr. Dimon said Thursday at the Investor Day conference that he supported certain new regulations to secure the financial system, but not all of them. He said JPMorgan had always supported the creation of a systemic risk regulator, which would be controlled by the Federal Reserve, to monitor the largest and most interconnected banks in the nation.
He disagreed with one proposal to create a separate agency devoted to consumer protection, which would regulate a whole host of activities from mortgages to credit cards.
“We want better consumer protection; we just don’t want a new agency. We think it should be done by the O.C.C. and the Fed,” Mr. Dimon said, referring to the Office of the Comptroller of the Currency.
“Yes, you can say they didn’t do a great job, but they are professional people,” he said. The elegant solution is for Congress to tell them do a better job.”
Mr. Dimon may get his wish, thanks to some persuasive lobbyists in Washington. Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Senate Banking Committee, said last month that he might drop demands for a new agency after pushing for its creation.
The Treasury has the same kind of “professional” people — Geithner came from the Fed and Hank Paulson came from Goldman Sachs. I think Dimon will agree that they are trustworthy for his purposes.
.