In its first unified front on a Wall Street reform proposal, the Senate today approved 93-5 an amendment that outlines the orderly liquidation of large, failing firms that pose systemic risk, while tightening emergency funding programs by the Federal Reserve.Read more
A new consumer protection ‘bureau” with sweeping authority over credit cards, mortgages and other financial products will be housed within the Federal Reserve but retain a degree of autonomy, according a new outline of financial system overhaul unveiled today. The historic reform would also create a separate systemic-risk council with the power to dismantle an institution deemed to pose a threat to the U.S. economy, “but only as a last resort.”Read more
Senate Banking Committee Chairman Christopher Dodd, D-Connecticut, said the two parties are still divided on the key financial oversight reform issue of a consumer watchdog agency to oversee credit cards, mortgages and other crucial financial products. But added he was optimistic that a bipartisan deal was possible in coming days.Read more
The proposal to house within the Federal Reserve what was initially an independent consumer protection agency has rekindled outcries from both sides of the debate – consumer advocates on one and business groups on the other. The plan is the closest one to a compromise to emerge and it is not quite off the table. But it still faces difficult hurdles ahead, with the Central Bank’s record in protecting consumers from unfair or predatory practices at the heart of the arguments.Read more
Attempting to garner Republican support for broader financial regulatory overhaul, Senate Banking Committee Chairman Christopher J. Dodd, D-Connecticut, has dropped the proposal for an independent Consumer Financial Protection Agency. Media reports now has Dodd placing the consumer watchdog agency within either the U.S. Treasury or the Federal Reserve, which already has broad rulemaking authority, such as finalizing provisions of the sweeping credit card reform laws that went into effect last week.Read more
There’s a good deal missing from the landmark Credit CARD Act taking effect today: Card issuers can still raise your rates on future transactions; impose or raise certain fees; cut your limit or close your account with the proper advance notice. What they mainly can’t do is hike the rates on existing balances. The ban on retroactive rate increases is at the heart of the reform laws signed by President Obama nine months ago. For U.S. consumers who now carry on average a household credit card debt of about $10,000, it marks some peace of mind.Read more
Days before the landmark legislation he helped write takes effect, Sen. Christopher Dodd unleashed some tough words against credit card issuers for raising rates and fees in the nine-month “grace period” leading up to the Feb. 22 compliance. The Credit CARD Act, as the reform is known, was signed into law by President Obama in May. Dodd, D-Connecticut, chairman of the Senate banking committee, was its chief author. He visited Hartford yesterday.Read more
It is a proposal that has sparked one of the most contentious debates within financial reform: An independent watchdog agency mandated to protect consumers from unfair practices by the providers of credit cards, mortgages and other financial products. The agency’s decisions on new laws would undoubtedly affect just about every American’s pocketbooks.
The Consumer Financial Protection Agency, CFPA, is a keystone of President Obama’s financial reform initiatives. And it is fighting for its life in the Senate.
The latest attempt by Democratic lawmakers to cap credit card interest rates in light of self-advantageous actions by card issuers is scheduled for Jan. 27, but this attempt is likely headed for the same fate as others have in recent months – defeat. Even some Democrats might join Republicans in seeing the latest attempt for a rate limit as detrimental to small businesses and the overall economy. They will point to the Federal Reserve’s report this week that consumer credit took a record plunge of $17.5 billion in November – the largest drop since the Fed began keeping records in 1943.Read more
Sen. Tim Johnson, D-South Dakota, is in line to replace the retiring Christopher Dodd as the chairman of the powerful Senate Banking Committee – but unlike Dodd, Johnson is a champion of credit card issuers. Johnson was the only Senate Democrat to vote against the package of landmark credit card reform laws set to take full effect Feb. 22. The reform was signed into law by President Obama in May.Read more
Connecticut Attorney General Richard Blumenthal, who is crusading against interest rate hikes by credit card issuers, said on Wednesday that he intends to run for fellow Democrat Christopher Dodd’s seat in the U.S. Senate, boosting the likelihood of keeping a voice for credit reform in the Senate. On Monday, Blumenthal called a news conference to announce he has asked Federal Reserve Chairman Ben S. Bernanke to order credit card companies to revert to their interest rates of a year ago. Banking industry officials responded with a warning that such regulation could make access to credit even tighter.Read more