The House Financial Services Committee has just announced that a new 1200 page legislation is being sent to the House Floor for a vote next week.
The Wall Street Reform and Consumer Protection Act (HR 4173).
This bill addresses a wide range of issues in the whole financial system - consumer protections, the "too big to fail" institutions, executive compensation, derivative regulation, mortgage reform, and rating agencies.
BTW, ever notice how Congress people like catch phrases: "too big to fail", "skin in the game", "say on pay." Kind of cute isn't it. I think that catch phrases fit well in sound bites and that repeating these catch phrases over and over helps Congress people get re-elected.
This new massive reform would create a Consumer Financial Protection Agency, an inter-agency oversight council, and a Federal Insurance Office.
I am not sure the reason all these pieces of legistlation are so massive.
I am not sure the reason that new agencies are needed, or why new agencies are just added to the old agencies.
I am not sure who has read all these pages of new regulation, and who knows what their impact will be to the overal economy, still struggling to recover, and to the housing market, still trying to recover.
My suspicion is that we will get many new legislative burdens, few of which will actually impact the problems that we faced with the housing market crash. The problems that caused the housing crash could have been addressed with existing agencies and targeted changes to lending programs and guidelines.
What we are getting now probably goes well beyond the fixes needed for the market.
The problems began with the changes that Congress brought to the secondary market in 1999 with the Commodity Futures Modernization Act. I am not sure how these new changes that Congress is working on in 2009 can be counted on to do anything but cause more problems.
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Richard Smith Conventional, FHA, FHA 203k, HUD $100 down purchases, VA, Jumbo VA, Rural Development, Jumbo, FannieMae Homepath, Home Equity Line of Credit (HELOC). |
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