Landmark Wall Street Reforms Signed Into Law

While it may not be as sex-ay as Breitbart punking every mainstream media outlet on the planet, it's worthy of note: the landmark Wall Street Refo

While it may not be as sex-ay as Breitbart punking every mainstream media outlet on the planet, it's worthy of note: the landmark Wall Street Reform legislation promised in 2008 at the height of the financial meltdown has now been signed into law.

Before everyone drowns in a sea of "but-buts" over what they DIDN'T get, let's talk about what WAS delivered:

  • Tighter consumer protections on credit cards and lending. Among them: Simplified contracts, requirement for more transparency in disclosures, full advance fee disclosure, free credit reports once per year
  • Consumer Protection Agency - This places all responsibility for monitoring and enforcing consumer protections under one roof, so that there is recourse and resources available to consumers from the Federal Government. Elizabeth Warren, who is one of the top candidates to head the agency, viewed this piece of the law as the foundation. Republicans fought tooth and nail on this, but it survived and became part of the final bill.
  • The end of "too big to fail" Yes, it really does end too big to fail. If institutions are teetering on insolvency and present a risk to the financial system, there is now a procedure in place to unwind them in an orderly fashion without infusions of government dollars to prop them up.
  • Real time reporting and transparency This is one of those quietly powerful provisions. Financial and trading data will be required to be available in real time in a standardized data format that can be used for analysis and review in order to be proactive about emerging anomalies and trends before they become a problem.
  • Stronger requirements for bank capitalization Without climbing deep into wonk-land here, requiring banks to actually have a better debt-to-asset ratio with some stake in the loans they originate will do much to stabilize the industry and move forward.
  • Shareholders now have a say in CEO compensation. That may not seem like much, but traditionally, shareholders don't have a lot to say about any company operations, so it does offer an opportunity for people to send a message to the CEOs of these companies.
  • An end to "debit card fee bloat" - The pass-through of debit card fees is now limited to actual costs, instead of the routine bloat banks have attached in the past. This one should be interesting to watch...if people pay attention.
  • Limits on rate hikes for existing credit card balances
  • The Volcker Rule - Banks may no longer trade securities for their own profit while also managing customer investments.

There are more, but it would require you to follow me down into the rabbit hole to WonkLand. But here's one term everyone should know, and remember: Systemic Risk.

Systemic Risk is the heart of this legislation. It controls how regulators are to approach their regulatory duties: Single-mindedly, with the goal of identifying and smoothing systemic risk. What is systemic risk? Any risk which poses, or might pose in the future, a threat to the stability of the financial system and consumers.

It's a very large, very important concept which is the heartbeat of this legislation. It's critically important, and to a large extent, smooths the sharp edges of critics who say this legislation doesn't go far enough. By setting systemic risk elimination as the primary goal, it goes farther than any Wall Street reform legislation we've seen since the days of Glass-Steagall and Depression-era reforms.

So in between floggings of the administration and Congress for their failures, let's at least take note of the fact that with today's signing, this Congress and Administration have delivered some of the farthest-reaching legislation in decades. It may not satisfy all, but it's a significant accomplishment worthy of note.

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