Today, the U.S. Senate voted 57-41 against cloture to proceed to consider Sen. Dodd’s (D-Conn.) Restoring American Financial Stability Act of 2010.
This legislation, as drafted, has several contentious elements, but perhaps most egregious is the creation of the Bureau of Consumer Financial Protection (CFPB), the Financial Stability Oversight Council (FSOC), and the regulation of Over-the-Counter (OTC) derivative exchanges. These new autonomous agencies will be sheltered within the Federal Reserve, insulating their decision making from the established traditional regulatory framework. Further, the result of a mischaracterization of OTC derivatives has led to unnecessary calls for heavy regulation.
Grover Norquist, President of Americans for Tax Reform issued the following statement:
“The Democrats think Americans want a massive new law written by a Senator who cannot run for re-election in safely Democrat Connecticut because of financial goodies he was given by big banks. And the legislation is co-written by Barney Frank who spent the past ten years opposing reforms of Fannie Mae and Freddie Mac and the Community Reinvestment Act that would have avoided the financial collapse in the first place. The new bank bill would institutionalize more bailouts. No longer would Congressmen vote on bailouts; they would be run by bureaucrats and flow automatically from the pockets of taxpayers to the pockets of banks that contribute enough to the Chicago political machine to make the list. The Democrats are wrong and the Senators who voted against cloture should be applauded.”