Wednesday, April 28, 2010

The Banking 'Reform' Bill

I hesitate to use the word 'reform', even in quotes, because it's anything but reform. Well, unless you define reform as changing a privately owned and controlled industry to a government owned and controlled industry. But only a liberal would do that.

Anyway, what about this bill that the Senate is kicking around now? Heritage gives you the bottom line:

And aside from all of those problems, there's another teeny, little, almost inconsequential thing you should know about...'bank' could mean just about any business:

The Dodd financial reform bill is beginning to scare executives. However, it is not necessarily scaring bankers or Wall Street fat cats. It is scaring motor cycle manufacturers, college presidents, retailers, car dealers, and even coffee shop executives. All of these people and more are waking up to the Dodd bill’s threat to their businesses.

If you read the Dodd financial reform bill carefully, the words “bank” or “financial” could refer to many more people than just bankers. Those words apply to any provider of “financial products” even if the major business of the company is something completely different. On page 131, the summary of the bill’s section creating a new Consumer Financial Protection Bureau says that the section “makes clear that financial products or services defined in the Act that are offered or provided for use by consumers primarily for personal, family, or household purposes are considered to be “consumer financial products or services” for purposes of this Act.

In addition, other key financial activities that are central to consumers are also included in this definition. These include, among others listed, the servicing of mortgage loans and debt collection services where the financial service being provided is the result of a contract between the lender and the servicer or debt collector. For example, mortgage servicers typically provide services to the owners of the mortgages. Nonetheless, this service is included in the definition of “consumer financial product or service” because of its obvious impact on consumers. A number of other financial activities of a similar nature are included in this definition.

In short, the definition is open-ended and could apply to just about any service that is sold to a consumer.

Oh, and the leaders of these 'banks' also include an interesting group of people, too:
...if you run a company or a college or just about anything that might remotely offer a financial product to consumers, the Wall Street fat cats this bill aims to regulate just might include you.
You might want to place a call to your Senators and tell them that this isn't really in any business' best interest.

There's my two cents.

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