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Ghost Busters - Who ya gonna call (to fund enforcement)


Healthcare Reform Boosts Financial Reform Chances
Based on our conversations with folks on the ground in Washington, the chances for advancing a “financial reform” package have dramatically increased since health care reform became law on March 23. 
On March 24, Senator Chris Dodd (D-Conn.), Chairman of the Senate Banking Committee and Rep. Barney Frank (D-Mass.), Chairman of the House Financial Services Committee, met with President Obama at the White House ostensibly to plan the next steps for advancing financial reform in some manner. Following that meeting, two key Senate Republicans – Bob Corker (R-Tenn.) and Judd Gregg (R-N.H.) – said it's unlikely the bill can be stopped. 
The timetable, apparently, is that an effort will be made to move the bill when Congress returns from the Easter Recess. Chairman Dodd has also promised Senator Tim Johnson (D-S.D.) and others that some amendments will be considered on the Senate floor, so at least it won't be "slammed" through immediatelly. After his meeting with the president, Senator Dodd was quoted as saying: 
"I know there are Republicans I serve with in the Senate who frankly don't want the 'just say no' policy when it comes to major legislative initiatives. So I'm much more optimistic in light of what happened on health care. I think health care, frankly, the outcome there has strengthened our hand in reaching out to people that would like to be part of the solution."
“The problem bankers face as this battle heats up stems in part from the continued misuse of the term 'bank' to apply to virtually any entity that deals with money,” said OBA President Roger Beverage. “Generally speaking, consumers are of an 'anti-Wall Street' mindset, and it's hard to convince them that traditional community banks in Oklahoma and elsewhere do their work on main street, not Wall Street. But we continue to press that case every day.”
The question is likely to be framed around the issue of supporting “fat-cat bankers” or “the people”, according to Beverage. Opposing the bill's provisions will likely be touted as being “pro-Wall Street” or something worse, and many Republicans don't want to be perceived that way. 
"They simply aren't going to feel as strongly about defending banks and opposing the Administration as they were in the health care debate," Beverage said.  "This is a much more technical measure, and not one that grabs emotions like health care.
"There's still a lot of anger out here about 'bailouts' in general, and about 'banks' in particular,” Beverage said. “It's not like the health-care debate where more than half of the country opposed the Administration's proposal. Reforming the financial system is something most Americans want done and there will be a great deal of pressure on the Senate to act. 
"Unfortunately, traditional community banks are caught in the cross-hairs," Beverage concluded.  "It's not going to take much of a 'compromise' to pick off a Republican or two, and that's the ball game.” 
Senator Corker was quoted as saying that Democrats in general, and the White House in particular, feel as if “they have the wind at their back.” He went on:
“I think the dynamics have changed since the bill came out of committee," Corker said, noting that Republicans have lost a chance to win significant changes to the legislation. "The leverage that existed up until Monday night is gone, and I think it's far more difficult to get us where we need to go."
It's probable that the Senate will adopt a small number of amendments to tweak some things, but generally will be required to bend very little to get a bill. The pressure to “do something quickly” will be intense, and most observers believe it will get done before Memorial Day.
With respect to the Consumer Financial Protection Bureau that would be housed in the Federal Reserve, one of the big issues is the lack of state funds to enforce its mandates
“This is going to be like 'Ghost Busters',” Beverage said in reference to the 1984 movie of the same name. “'Who you gonna call?' will become a stark reality when it comes to enforcing the new consumer rules.  Where's the money going to come from?  Bank customers and other consumers, that's who."
“And separating safety and soundness concerns from consumer protection issues is nonsense,” he concluded. “But that's logical. Bashing banks isn't, and it's much, much easier to accomplish, regardless of the potential for unintended consequences.” 
Beverage also noted that this proposal does not end the concept of "too-big-to-fail" as a matter of national policy, even though that's one of the stated goals.
"I think any fair reading of what's being proposed - concentrating the power in Washington to monitor the 15 or so largest institutions and publicly naming those that contribute to a resolution fund - institutionalizes "too-big-to-fail" rather than ends it," he said.  "When you couple that with taking away the Fed's oversight of state member banks and doing away with the 'canary in the coal mind' so to speak, it will severely hamper the Fed's overall ability to see things that are happening on the ground where community banks live and work, and will focus monetary policy decisions based on what's happening with the nation's largest firms.  That can't be good." 

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