Chris Dodd's Last Land Mine: Transforming the Fed and Screwing the Consumer
Pic credit: toothpaste for dinner
Don't hate but from Wikipedia:
A step shaft (a.k.a. land mine) is usually a victim-triggered explosive device which is intended to damage its target via blast and/or fragments.
Notice you didn't hear a peep out of the NY Fed when a handful of clever Fed Presidents were campaigning to keep the Fed "independent" and free from political interference. JDA will ignore the fact that they gave that up about 18 months ago when they pledged whatever it takes to prop up everyone except Lehman Brothers as this is not about arguing over whether or not they are actually independent but criminalizing the NY Fed. Duh.
Dodd is making his last move and it's a doozy.
Sewell Chan via NYT (and seriously, does Sewell Chan ever sleep? I'm just wondering):
The bill that Christopher J. Dodd, chairman of the Senate Banking Committee, will introduce on Monday appears written with the goal of forging a consensus that can overcome partisan division, with provisions that incorporate ideas from both Democrats and Republicans.
Among the most recent provisions in the bill to emerge, according to people who have been briefed on the draft, is one that would curb Wall Street’s influence over the Federal Reserve Bank of New York. Its president would be appointed by the president of the United States, not by a board that includes representatives of member banks.
Another rule would ban bank officers from sitting on the New York Fed’s board, meaning that Jamie Dimon, chief executive of JPMorgan Chase, would probably have to leave the board.
Then it gets weird.
The legislation would create a consumer protection agency within the Federal Reserve to write rules governing mortgages, credit cards and other financial products, said the people, who insisted on anonymity because the details were still in flux.
In a concession to liberals, states’ attorneys general could sue violators of those rules, and the agency would have enforcement powers over large banks, mortgage originators and servicers, and other large lenders.
But in a nod to Republicans, the bill would allow a council of regulators, led by the Treasury, to overturn proposed consumer rules by a two-thirds vote. And although the consumer protection agency would have a director appointed by the president, it would be housed within the Fed, an anathema for consumer advocates.
How on Earth does this have a chance? Congress may not know its ass from a hole in the ground but it knows it's in trouble with the population for blowing that whole babysitter of the Fed thing. They don't seem prepared to accept that responsibility at this point so why hand over more to the beast they can't tame?
No clue. Not even wild speculation can answer that one.