Industry News
Reid loses cloture vote on financial regulation
The plan was for the financial-regulation reform bill to have a vote for cloture -- that is to say, a vote to end debate and move to a final vote -- at 2 p.m. today. But a handful Senate Democrats angry that their amendments haven't been considered derailed that. At 3:15 p.m., Democrats called an emergency caucus meeting. About 30 minutes after that meeting, Majority Leader Harry Reid called for a cloture vote.
He lost; 57-42.
And he lost because he lost Democrats. Republicans Olympia Snowe and Susan Collins actually voted for cloture. Their votes were canceled out by Democrats like Maria Cantwell and Russ Feingold, who aren't ready to give up on their amendments.
Before getting to what that means, it's worth saying why Reid wants to move to a final vote. The answer is floor time. Next week, the Senate is scheduled to take up the next war supplemental, which will have funding both for Iraq and Afghanistan and also for various disaster-relief efforts, and it will take up a bill to extend economic supports for the jobless. If the Senate doesn't finish financial regulation this week, it probably can't do those bills next week because the GOP's routine filibusters mean that each vote will require days of floor time. And the plan, as of now, is for the Senate to adjourn come Memorial Day. Of course, the Senate could just choose to work past memorial Day, which would solve the problem of floor time.
As for what happens now, debate on financial regulation will continue. More amendments will be considered, at least if Democrats and Republicans can come to an agreement on whether to consider them. And another cloture vote will have to be called. That might be bad for the Senate schedule, but it's probably good for the bill. This is the rare process in which the amendments are making the legislation substantially better. If the Senate has to work over Memorial Day to accommodate that process, so be it.
SPECIAL ALERT: FRAUD UPDATE
The Online Lenders Alliance released the following alert to its members on December 16, 2009.
In yesterday's newsletter, we reported on a Fraud Alert that involved online transactions using an ABA /routing number that is associated with the Federal Home Loan Bank of Indianapolis. The bank itself has been notified of the problem and we are awaiting their indication of any actions they may be able to take.
Several OLA Members have reported on their efforts relating to this fraud. They are summarized below:
Obama administration's proposed Consumer Financial Protection Agency hits a snag.
Congress is balking at a provision that would require that banks offer "plain vanilla" financial products — simple, straightforward loan products like the traditional 30-year mortgage — in addition to their more exotic loans.
The objection is that the government would be in the business of dictating to lenders what kinds of loans they must offer.
And there's something to this although a bank offering plain vanilla mortgages that the customers actually understand might find they are doing a pretty good business.
The government, however, has a legitimate role as steward of the economy in telling lenders what kinds of products they cannot offer — like unfair and abusive loans made through deceptive and misleading practices.
The financial industry, which is struggling mightily to kill this agency, complains that big government is weighing the scales against it. But the individual consumer dealing with a giant financial institution is hardly playing on a level field.
THE NEW AGENCY would consolidate regulatory functions now scattered across seven agencies and would have authority over a wide range of debt — mortgages, credit cards, auto loans, payday loans and consumer loans.
Read more: Obama administration's proposed Consumer Financial Protection Agency hits a snag.
A watchdog for consumers
Thursday, 07 January 2010 16:16
With great fanfare, the U.S. Chamber of Commerce has rolled out a multimillion-dollar lobbying campaign to defeat creation of a federal Consumer Financial Protection Agency. Contrary to the chamber's scare tactics, the new Consumer Agency would merely be a consolidation of the present fragmented federal regulatory system, with sufficient authority for the new agency to accomplish its goal of meaningful consumer protection.
Not all business leaders think like the national chamber. American Business Leaders for Financial Reform, a newly formed coalition of senior executives, companies and industry groups, supports an independent consumer agency and is actively working to counter the negative campaign by the big boys.
Biggest Banks Stepping Into Payday Arena
The big guns' entry into payday lending may finally bring a fringe financial product out of the shadows and into the financial mainstream, despite howls of protest from consumer groups and the risk of tighter regulation.
For more than a decade, the nation's payday lenders have battled the perception that they operate on the shadowy "fringe" of the mainstream financial system, outside the long reach of government regulators and rules dictating prudent lending.