As you already know if you read the news, the House version of the financial reform bill will probably come to a vote today, and it should have the votes to pass unless the Republicans/conservative Democrats manage to pass a poison pill amendment — like Walt Minnick’s amendment to kill off the CFPA and replace it with a council of regulators. (I’m not making this up.) The bank lobby moderate Democrats did manage to get federal preemption of state laws, which means that states can’t set higher standards than federal regulators and sounds like a bad thing (anyone remember the OTS?), but Mike Konczal says it might not be as bad as it sounds.
To be honest, I’m not sure what’s in this thing at the moment, and who knows how many little loopholes have managed to sneak in, especially when it comes to derivatives regulation. But if it has a meaningful CFPA (which I’m pretty sure it does), it’s a step forward. If it doesn’t break up big banks, it’s not enough.
By James Kwak