Daily Archives: May 15, 2010

President Obama’s Weekly Adress: 5/15/10 Wall Street Reform & Main Street

The President explains how Wall Street Reform will not only end bailouts and bring accountability for big banks, but empower consumers, shareholders and community banks.

The White House Blog.

The 10 Most Wanted Lobbyist Loopholes
Posted by Dan Pfeiffer on May 04, 2010 at 07:00 AM EDT


Loopholes are a lobbyist’s best friend.

As debate on the Wall Street Reform bill returns today to the floor of the Senate, lobbyists are working overtime to insert loopholes and special provisions into the bill. Back in March, Treasury Secretary Geithner made clear to the audience at the American Enterprise Institute the threat we face at this stage of the game:

“…watch this process closely, for it will be a test of our capacity as a nation to deal with complex and consequential problems. When you see amendments designed to weaken the basic protections of reform; when you see amendments to exempt certain types of financial firms or financial instruments from rules; ask why we should be protecting those private interests at the expense of the public interest.”

So to kick off this week of amendments and help you follow along, please take a look at the Top Ten Most Wanted Lobbyist Loopholes:

  1. Ok, Consumer Protection Rules are Fine… Just Don’t Enforce Them. The current bill would apply the same rules to providers of consumer financial services or products, whether the provider is a bank or a non-bank financial provider. The bill would also allow State Attorneys General to enforce those rules. Lobbyists are pushing hard to amend the bill so that Attorneys General lose their enforcement authority. Why does that matter? Because the Bureau would only supervise larger market participants. Without state AG enforcement authority, the citizens of their states will have much less protection against illegal conduct. If you want to weaken consumer protections, that’s one way to do it.
  2. Letting Non-Banks Play by a Weaker Set of Rules. We know this is coming, so keep an eye out: attempts to give car dealers that make car loans and other major providers of financial services a big exemption from the consumer protection rules. Now be aware: some people try to scare small businesses by saying that the consumer financial protection bureau will regulate main street businesses like orthodontists and florists. That is not true. But if a car dealer makes loans, or if a big department store sets up a financial services center, it’s doing what banks and credit unions do, and it should play by the same rules.
  3. If You Can’t Kill Consumer Protection Now, Starve it to Death Later. One of the keys to effective consumer protection is having a consumer financial protection bureau that is independent. And one of the keys to independence is having an independent source of funding. So be prepared for attempts to take away the bureau’s source of funds. And also watch out for broader attempts to restrict the bureau’s independence or chip away at its ability to establish clear rules of the road for a fair and transparent consumer financial marketplace.
  4. Preventing States from Protecting Their Own Citizens. Under the current bill, the Bureau of Consumer Financial Protection would set minimum standards for the consumer finance market, but states would still be allowed to adopt additional protections. In other words, federal consumer protections would set a floor, not a ceiling. There’s likely to be a fight about that provision. Citing the doctrine of “preemption,” big banks will try to take away states’ ability to supplement federal consumer protections. Why is this a problem? Because state officials are often the first to learn of new abuses and new problems in the marketplace, and we should not get rid of that canary in the coal mine. Federal law can overrule or “preempt” state law when a state law would significantly interfere with national banks’ business of banking, but states should otherwise have the right to protect their citizens as they see fit.
  5. Removing the Derivatives Trading Requirement to Protect Wall Street Profits. Under the current bill, standard derivatives would have to be traded on exchanges or other electronic trading platforms. Expect amendments to eliminate this trading requirement. Why? Because not everyone likes transparency. Today, the big derivatives dealers make big profits by charging end-users extra spreads and hidden fees, and they don’t want that to change.
  6. Stretching the Derivatives “End-User” Exemption into a Hedge Fund Loophole. Under the current bill, there is a narrow exemption from the derivatives clearing and trading requirement for commercial firms that are not financial companies, not major participants in the derivatives market, and that are using derivatives to hedge their real risks – not taking one-way bets like AIG. Be on the lookout for attempts to stretch this exemption into a loophole – for example, by saying that the exemption should apply hedge funds and other financial companies.
  7. Creating an “AIG Loophole.” Under the current bill, the Financial Services Oversight Council would have the ability to designate a very large “non-bank” financial company – like AIG, for example – for tougher supervision by the Federal Reserve. Since one of the key principles of financial reform is that firms should be regulated according to the risks they pose, not according to their corporate form, this is an important provision. But rest assured, there are large “non-banks” out there who would rather not be scrutinized quite so closely.
  8. Who Needs to Know What’s Happening at Insurance Companies? Insurance is regulated by the states, not the federal government – and this bill doesn’t change that. But this bill would give the Treasury Department the ability to collect information from insurance companies so that it can help identify emerging risks before they blow up the financial system – like AIG. After so many insurance companies got into so much trouble that they needed government support to survive, you’d think that would be a no-brainer. But not everyone agrees. Keep an eye out for loopholes that would protect insurance companies from a number of provisions in the bill – including even basic information gathering.
  9. Letting Firms Make Loans Without Skin in the Game. A key lesson of the crisis is that firms in the mortgage business should have a stake in the loans they sell or securitize. Skin in the game gives strong incentives to make good quality loans. Mortgage industry lobbyists are pushing hard to kill this idea. It’s cheaper for mortgage lenders and Wall Street to be in the mortgage business if they don’t have to worry about the borrower’s ability to pay – but it’s a lot more costly for Americans to perpetuate the same system that helped cause the housing crash.
  10. Preserving “Too Big to Fail” While Pretending to Kill It. The key to preventing future bailouts is to end the problem of “Too Big to Fail.” And the only way to do that is to make sure that we can shut down big financial firms in a swift, orderly way if they’re on the brink of failure. Of course, not everyone wants to see “Too Big to Fail” disappear, since it lets the biggest firms borrow money at lower cost and avoid the consequences of excessive risk-taking. But no one wants to be caught defending the status quo. So defenders of the status quo are using a sleight of hand: pushing to make the resolution process so unwieldy that it can never work. By proposing amendments that look tough but that make the resolution process unworkable, opponents of reform will try to save “Too Big to Fail” while pretending to kill it.
Dan Pfeiffer is White House Communications Director

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Filed under bailout, insurance industry, President Obama, Timothy Geithner, Wall St. Reform, weekly address, White House Blog

Saturday Morning Cartoons: Iron Man Vs. Titanium Man

After taking the family to see Iron Man 2 last night I just can’t get enough of that metal headed, industrial playboy and superhero, Tony Stark. So this morning with my bowl of Wheaties, it’s time for another fix of Iron Man from this classic 1966 episode Marvel Comics cartoon.

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Filed under Iron Man, Saturday morning cartoons

Concerns and Advice for the Middletown Administration

by Carolyn Schwebel

Since I have been unable to attend township committee meetings, following are some of my own thoughts, concerns, and suggestions regarding Middletown matters. I am speaking for myself only.

Township committee meeting locations:

“It’s Your Town” reported about the May 3, 2010 Middletown Committee workshop meeting that “The workshop meeting was held in the Conference Room, which was filled to overflowing. People were sitting on the floor due to the lack of seating for the public and the room temperature was excessive because the day was unusually hot. The overflow crowd was remanded to the hallway for the duration of the meeting.”

A speaker at the May 3, 2010 meeting recommended moving workshop meetings from this small room to the courtroom when a prescribed number of people attend. I make the same request or else that all meetings be held in the larger room. If you want to keep the informal flavor for workshop meetings, there is no need to sit on the dais; the tables below it could be used. Otherwise, there are signs of disrespect for the citizens attending, ADA problems, including reduced hearing of the meeting, lack of proper seating, and probably violation of fire codes for maximum capacity of the small conference room.

Current revision efforts of Middletown Human Right’s Commission (MHRC) mission statement:

These revisions of the mission statements for the commissions and boards that “currently do not have clear definitions” were described by your attorney at the May 3, 2010 meeting as necessary for the Citizen Services Act. My review of that act, P.L. 2009, c.141, which provides revisions to NJSA 40A:9.12, and of the DCA advisory for it revealed that information required for a township directory should include C.40A:9-9.2 Directory of local authorities, boards, commissions…(f) the appointing authority and the enabling statute, ordinance, or resolution, if any.”

Nothing indicates that existing resolutions must be revised; Unilaterally changing the MHRC mission statement, which is part of its official bylaws, appears to be a violation of the bylaws procedures and Robert’s Rules of Order. For those boards and commissions that have no mission statements, rather than being written solely by an attorney, the mission statements should include input from members of the boards or commissions.

MHRC membership:

The MHRC membership requirement is set in resolution and bylaws at eleven members. We are deeply grateful for the four new members on 2010. Discussion by the Township Committee to reduce that number by nearly one-third is, however, unwarranted. Under P.L. 2009, c.141 when commission vacancies occur they must be filled in a timely manner:
“C.40A:9-12.1″h. Upon the removal of such officer for cause in accordance with law, or for any other reason prescribed by law. Whenever any of the above shall occur the appointing authority shall forthwith fill the office for the unexpired term in the manner prescribed by law…” (emphasis added).

To comply, please appoint members to our four remaining vacancies as soon as possible, preferably some with citizens who are racial minorities, since at present there is none in the membership.

Another committee may not be needed:

Creation of a Military Affairs committee, as suggested by the mayor, is surprising, since I had heard that the township committee was seeking to reduce the number of boards and commissions. Attention to our veterans is very important; in fact, as our minutes confirm, the MHRC has been looking at human rights issues for returning veterans for over a year. Due to a storm, we had to cancel a meeting at which an active, recent disabled veteran, head of a local VFW, would meet with us. He is scheduled for our September meeting. You are welcome to attend. The appointment of a recent veteran to the MHRC could help us with our goal of assisting veterans. We also have counseling and other helpful resource numbers for veterans.

Lack of response from Township Committee to MHRC requests for input:

Four years ago, in July 2006 (attached), MHRC sent a request to the Township Committee for suggested projects for the MHRC. No answer was ever received. Once again, a month ago, on April 12, 2010, our letter including the same request was hand-delivered to Town Hall for the Township Committee. We have not received a response, as of today, despite follow-up calls. Also, our vice chair and I made at least a dozen contacts by phone, e-mail, and in person to schedule the final part of the SPCA food drive, a publicity photo with the mayor to reemphasize for the public the continuing need for pet food and to provide positive image for the township in the media.

On each of these issues, we were not afforded the courtesy of a response. It is important that all members of the community, including volunteers, be given respect by the Township Committee and other leaders.

I will happy to discuss any of these items with you.

Cordially,
Carolyn Schwebel

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Filed under Carolyn Schwebel, Middletown Human Rights Commission, Middletown Township, Middletown Township Committee

It’s your Town Newsletter Volumn 2, Issue 9 For 5/03/10, Details Discussions Over Defeated School Board Budget

I’m a little late with posting the latest edition of the Middeltown newsletter “It’s Your Town”, but as they say it is better late than never!

Issue 9 of the newsletter details the Monday May 3rd, 2010 Middeltown Township Committee Workshop Meeting that despite having and overflow crowd in attendance, was held in the small conference room located by the Clerk’s office instead of being moved to the more spacious court room.
Some of the items discussed included:

– Fire Department Audits
– Recycling Ordinance
– Citizen Service Act
-Community Development Consolidation Plan
-Shadow Lake Bond Ordinance
-School Board Budget Amendment

A large portion of the public comments portion of the meeting dealt with concerns over the defeat of the school budget and what type of recomendations the Township Committee would make to the school board in order to further trim funds from it’s defeated budget.
You can read all about that as well as the other items listed above by clicking >>> Here for the latest copy of It’s Your Town Newsletter.

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Filed under Its Your Town, Midddletown Board of Education, Middletown, Middletown Township Committee, Newsletter, school budgets, workshop meeting