In his State of the Union speech, President Barack Obama proposed taking $30 billion out of the bailout money returned by big banks and injecting the funds into community banks to generate more small business loans. But the plan will likely fall short in a lending arena where low demand matches low access to credit. Moreover, the small-biz bailout has already generated enough opposition to place it in doubt – particularly if a full vote by Congress is required.
The CEO of Bank of America, the nation’s top lender, said his institution is not too big and that the central issue for those seeking financial sector reform shouldn’t be size but how “you manage risk.” Brian Moynihan, who took over BofA’s top job on Jan. 1, told CNBC in an interview from the World Economic Forum in Davos that the U.S. government should continue to play the role of stabilizing the industry to avoid another financial crisis. But Moynihan said the answer is not in breaking up banks…
While President Obama blasted major banks in his radio address for mobilizing to stop his fee on financial firms with $50 billion in assets, a top lobby group for Wall Street was doing just that, a media report says. The Securities Industry and Financial Markets Association (SIFMA), the top lobbying group for financial markets participants, is currently considering challenging the constitutionality of Obama’s Financial Crisis Responsibility Fee, according to a report in the New York Times.
It orchestrated an expensive and ambitious campaign against a Consumer Financial Protection Agency, but the U.S. Chamber of Commerce lost that bid on Friday when the House passed its financial oversight reform bill, and the new agency along with it. Now the U.S. Chamber, representing more than 3 million small-to-medium businesses and organizations, is fixing its sights on the Senate version of financial regulatory overhaul, and hoping to convince moderate Democrats to downsize the CFPA’s regulatory reach and fine-tune legal ambiguities.
Despite vigorous opposition from banks and the U.S. Chamber of Commerce, the House today approved its landmark financial regulation reform bill that creates a new “oversight council” to monitor “systemic risk” to the economy. It also creates a Consumer Financial Protection Agency that will have the power to enforce and build upon the credit card reform laws set to take full effect in February.
The House Financial Services Committee today approved the so-called systemic-risk bill that supporters claim will put an end to “too big to fail” financial firms with the creation of an inter-agency oversight council. The Federal Reserve will serve as the agent to the council, under the proposed law, which could be taken up by the full House next week.
The opposition to President Barack Obama’s proposal that would create a new consumer financial protection agency is growing, with multi-million TV ad campaigns and critical studies. One such study shows that such an agency would harm small businesses dependent on credit cards and other financial products.