Republicans: It's time to re-regulate the banks

Republicans and Democrats need to compromise and fix banking regulation. Photo: Associated Press

YAKIMA, Wash., November 17, 2012 – Have things changed in Congress? Republicans need to accept that a new age has dawned in America, an age in which thinking people realize that banks are bigger than is healthy for our country. Last July, former Citigroup Chairperson and CEO Sandy Weill, called for splitting commercial banks away from investment banks. He stated that the Glass-Steagall Act of 1933 led to 50 years of regulation on banks that kept our financial system free of crises.

Thanks to the last Bush Administration, deregulation and the growth of gigantic banking institutions led to our financial collapse.  

While our government needs to encourage business, including banking and investment firms, it clearly needs to regulate these industries. Commercial banking and investment institutions until the 1980s were kept separate by our government. Today many are blended together under one corporate trademark. This is dangerous.

When larger banks started buying up many smaller ones in the 1980s, government needed to adjust the banking regulations to protect everyday citizens, but instead they let the big banking lobbies influence the laws. The banking laws of the 20 years prior to 2008 were basically laws which deregulated the industry.  

What happened to the days of reasonable mortgage contracts and credit card interest rates?  

Wealthy investors, large financial institutions, and the government seemingly forgot America’s middle-class, and sticking with what was good for America. It’s a classic case of plutocrats loosing site of what’s good for their country. 

Yes, folks, we live in a plutocratic democracy.  

Today, the government needs to decide if it’s good for a bank, or any business, to be “too big to fail.” If it is too big, then it needs to be forced to downsize. Downsizing would produce more jobs, more security, and more money flowing through our economy. This is one aspect of what the Dodd-Frank Wall Street Reform Act of 2010 addresses.  

The voters in this last election realized that slow growth is sometimes better than a quick recovery. Moving at a slow, even pace to build a solid financial base is better than quickly gained profits which are not secure. 

Slow, solid growth and creating stability is what President Obama is attempting to do.  

Created by Dodd-Frank, The Financial Stability Oversight Council (FSOC) is now a part of the Department of the Treasury. It has three main objectives: (1) Identify threats to our financial stability; (2) promote market discipline, and (3) respond to emerging risks to our financial system.  

This is good government, protecting its citizens from a greedy Wall Street.  

Large banks were actually using their customer’s deposits to invest in speculative investments until Obama asked Congress to invoke what is now known as the Volker Rule. This rule prohibits risky, speculative investment activities by banks that are not in the best interest of their customers.  

It makes one long for the old days when banks were too small for this ridiculous greedy activity.

Under Title Ten of the Dodd-Frank Act, a Consumer Financial Protection Bureau has been established with jurisdiction over banks, credit unions, securities firms, payday lenders, mortgage lenders, debt collectors, credit cards and student loans. The Bureau’s task is to monitor iniquities and protect the consuming public.  

Once again, the Republicans hate this idea of having a central bureau with the authority to regulate and protect the consuming public. This is why they backed Mitt Romney, in order to return to the days of no strong central government regulation of business.  

Republican Senators have refused to confirm Obama’s nominee for heading the Bureau because without a director the Bureau has little or no power due to a quirk in the law. Hopefully, now with the election behind us, the senators will have a spirit of compromise. But don’t hold your breath. 

After an election, a general spirit of optimism pervades through our country with people expecting things to change for the better. If the Republicans in the Senate and House were to show a change in their relationship to the Democrats and engage in honest dialogue that would unite and move our country forward, it would be heartening.  It would mean that compromise would again become a word that’s respected.  

Republicans and Democrats, the public needs to see you come together and get something done.



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Larry A Momo

Larry Momo has been labeled by his family as a curmudgeon, nit picky and a complainer.  After four years in the Air Force working for the National Security Agency, Mr. Momo returned to the city of Los Angeles and attended Cerritos College and the University of Southern California.  He studied political science and accounting before taking the helm of the family business. 

Some years later, he sold the family business and moved his family to Yakima, Washington where he developed a business in micro-computers.  After sixteen years of programming, Mr. Momo accepted a CEO position of a small company near Portland, Oregon, from which he retired in 2004. 

Never one to sit around, he now works as a school bus driver in addition to his social security.  Writing and contributing to the political dialogue of our country, plus being a curmudgeon, is his developing art form.  Please read and enjoy A Curmudgeon’s View and feel free not to agree with everything written by him.  After all, he is a curmudgeon.

 

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