The Billion-Dollar Bank Heist

How the financial industry is buying off Washington—and killing reform.

Newsweek
7/10/2011

…Take what’s been happening with the Consumer Financial Protection Bureau, which is the law’s most significant and controversial provision. The agency is set to go live next week, except that Republicans in the Senate have made it clear they won’t confirm anyone to serve as its head unless the agency is radically scaled back. All told, Dodd-Frank has some 300 provisions, and the bulk of them are under attack by a number of foes, from bankers to check-cashing companies to free-market Republicans.

And so it is, says a discouraged Rep. Barney Frank, that his eponymous bill is “facing a death through a thousand cuts.”…

…It’s simple to see why banks oppose Dodd-Frank. A new consumer-protection agency means another regulator poking into their business, telling them how they can market a mortgage or credit card. Under the new law, for example, lenders and investors can’t just package mortgages and sell them to clients, as they did in the years leading up to the financial meltdown; they would need to hold on to at least a 5 percent share of most mortgage-backed securities. The final bill also caps the fee a financial institution can charge retailers on debit-card transactions, eating into a huge profit center for the banks. And the law limits the portion of their holdings big banks can wager on riskier ventures such as derivatives and commodities futures. In recent years, such bets have been a windfall for banks…

The complete article is at Newsweek.com

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