The U.S. Senate passed the Financial Regulatory Reform Bill – and now the aftershocks will hit.
The Colorado Bankers Association, for one, is not pleased about its passage.
Don Childears, CEO of the bankers association, which represents 90 percent of the $103 billion in assets held by 193 Colorado banks, said that Congress, rather than focusing on the reform that the nation needed, filled the bill with unnecessary and harmful provisions.
“The unfortunate reality is that this bill will raise the costs of credit and stifle credit availability – two things that don’t help us recover from this recession – while placing new burdens on our local regulated banks – burdens from which Wall Street is exempt (because the legislation is not enforceable),” Childears said.
The CBA and other bankers had been advocating for financial reform that would help protect the community, businesses and the state’s mortgage markets from threats of another financial meltdown, he said.
CBA has advocated that Congress take action to implement a systemic oversight council, responsibly improve consumer protections, create a system that allows appropriate bodies to step in and stop companies that are too big to fail, and create a system of regulation that places nonbank financial institutions on a similar level of regulation as our country’s regulated banking industry,” Childears said.
Reality and reform, however, don’t always meet.
The Dodd-Frank bill does contain reforms, although Congress’ 2,300-page bill contains many unrelated proposals that the CBA said will have an overall negative impact on credit availability to consumers, communities and businesses from Colorado banks.
“The reality is that Congress’ bill will require regulators to write 500-plus new rules, 5,000-plus new pages of regulations, create a massive new government bureau to oversee consumer protection, keep the unregulated nonbanks out of the reach of enforcement of these rules, and implement special interest price fixing for big retailers, like Wal-Mart, that bank customers will have to swallow,” Childears said.