There are some that would say that the consumer won the litigation battle with the banks. However, the larger hits that had been angled toward the bigger banks were dodged. The lawmakers have finally agreed to revamp the financial regulations that will implement new protections for the consumer.
The House of Representatives and the Senate were finally able to come to an agreement that established a Bureau of Consumer Financial Protection. This new Bureau of Consumer Financial Protection will help to find solutions to issues like the sloppy lending and futile regulation that was accountable for the nation’s monetary problems. The new regulatory laws will affect the individual who will be regulating the financial sector and how that sector is regulated. The new laws will apply to credit cards, mortgages and the bigger banks like global banks.
Instead of having a board of directors, the new bureau will have an independent director and source of funding. This will help to strengthen the new bureau instead of weakening it. Even though Congress thought that the new bill would hit the bigger banks harder then they thought it would.
The new regulatory law does not prevent the government from bailing them out if their failure threatens the economy. It also does not limit the size of the bank. Congress has initially thought that banks would have to take responsibility and prepay money into a fund when breaking up financial institutions that are failing, yet this is not the case.
The litigation from Congress also makes the banks and Wall Street take fewer risks. Congress compromised with the banks to take less risky bets with trading types of derivatives, while Wall Street must take less systemic risk. The compromise now uses hard new rules and oversight that make both Wall Street and banks take fewer risks in trading. This allows a reduction of risk for our American manufacturers and lenders. Hopefully this will help to reduce the risk in trading on Wall Street and build the economy back to a more stable condition. What is also affective in the new regulations is the fact that banks can not carry out trading operations if they trade on for their clients as well.
With the new regulation being moved into place, there is great hope that the current economic situation will become more stable producing more jobs for the working individual who needs to feed their family. This regulation also let the banks and Wall Street know that their careless trading which has become exceedingly reckless will not be tolerated.
Things need to be changed in order for our world to grow. The new regulation passed by Congress will hopefully keep the recession that we have been experiencing from happening again. While the economy grows more stable with this new regulation in place it is safe to say that in the end the consumer has won.
About admin