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.

After 18 months, Wall Street reform is on its way to the President's desk. The Senate invoked cloture by a vote of 60-38 and the final conference committee report passed by the same margin. A good summary of the key provisions can be found here.

Even before the final passage, Minority Leader John Boehner called for its repeal.

"I think it ought to be repealed. There are common sense things we should do to plug the holes in the regulatory system that were there and to bring more transparency to financial transactions," he said. "Because transparency is like sunlight and sunlight is the best disinfectant."

"I think the financial reform bill is ill-conceived," he said. "I think it is going to make credit harder for the American people to get."

Here is a list of Boehner's 1,299,120 reasons why repeal appeals to him. Draw your own conclusions.

Reactions from around the blogs:

Continue reading »

"What do I have to do to get you into this car?"

"How much can you afford to pay every month?"

"My manager's in a good mood."

They're trying to add a couple more car salesman cliches to the ones everybody knows:

"When you take out a car loan - probably the second-biggest financial decision of your life - you don't need a watchdog looking out for you."

"Watch out ... this will cost you a lot more if somebody's representing your interests."

And if you believe those last two statements, allow me to show you this brand new baby - it's got whitewalls and mag wheels, tinted windows, I'll throw in the deluxe sports package along with that ... oh, and we strongly recommend undercoating.

Campaign for America's Future and CREDO have set up a site where you cen send a fax to Barney Frank and Chris Dodd with a simple one- or two-click process, urging them protect American consumers from shady auto loans. And, if you act now, it's absolutely free! (Racing stripe and rustproofing not included with fax.)

It's easy to sound flippant, since everybody knows why we all hate car dealers, but the topic's deadly serious: As we've discussed at length, auto dealer lending practices are a disgrace. A massive, multi-year study showed that African Americans are charged more than whites for the same loans. Auto dealers routinely mark up the loans they offer, without disclosing that information to customers - a practice that costs consumers $20 billion per year and adds an estimated $647 to the cost of each vehicle sold. Auto dealers also play games with "gap insurance" that covers the replacement cost of your vehicle for loan purposes if it's totaled.

Another common car dealer trick is to "sell" a car to a customer by claiming they qualify for a no-interest or low-interest loan, letting them drive away in it, then calling them a week or two later to say the loan fell through. Dealers do this because most customers will have gotten used to the car by then, which means that many of them will accept loan terms that wouldn't been unacceptable at the point of sale.

Car lenders have made a particular point of preying on young soldiers, who are living far from home in great distress. That's why Holly Petraeus, wife of Gen. David Petraeus, is strongly in favor of regulating auto loans. The Petraeus family are hardly known as big lefties ...

Car dealers and their allies love to say they should be exempted from financial reform because they weren't part of the financial crisis. But think about it: Why should auto loans be regulated when they're provided by banks and credit unions, but not when they're provided by auto dealers? That's anticompetitive. What's more, we've already seen that auto dealers sometimes encourage applicants to lie when applying for a loan. If bank auto loans are regulated but car dealer loans aren't, unscrupulous bankers will simply use car dealers as willing minions to make an end run around consumer protection. With auto lending a nearly $1 trillion market, the last thing we need is a replay of the "no doc" mortgage scandal with car salesmen playing the part of mortgage brokers.

The defend-car-salesmen crowd has a couple more arguments, and a credulous Associated Press commentary by Rachel Beck summarizes them: First Ms. Beck repeats the assertion that lending legislation would affect dentists who allow patients to pay over time (the Senate bill does not and this will undoubtedly be clarified and corrected in conference.) Then, she conflates "family dentists" with auto dealers, as if they were both trusted service providers. (It's true that buying a car is as painful as a root canal, but that's as far as the comparison goes.)

That sleight of hand allows her to come up with this:

Just like the dentists, (auto dealer Tony) Federico says that more regulation will boost his costs. It could mean he does fewer loans, or is less generous in the deals he offers. Consumers then would have to seek out loans elsewhere, which could be less convenient and cost more.

"I am always looking out for my customers' best interests, but I also want to do deals that are worthwhile," Federico says.

So, who are you gonna believe - somebody named "Holly Petraeus," who's concerned about military families, or your trusted family friend Tony Federico? Hey, Tonyyy ...

Tony says you'll pay less getting a loan through him, even when he's done taking his market - and when has a car salesman ever lied? Sure, studies show that he's wrong, but who are you gonna trust here - the Center for Responsible Lending .... or your old pal Tony?

Rachel Beck's piece is embarrassing to read. Why would newspapers run it? Let's not forget that, like politicians, newspapers rely on car dealer revenue for their bread and butter. (Why, the Sun-Times was even willing to cut a deal with the New York Times this week to run luxury car ads in the Chicago market; luxury ads are especially lucrative.) Ad revenue buys a lot of credulity, especially on the editorial pages.

Hey, maybe everybody's wrong but Tony Federico and Rachel Beck. They're not - but let's say for argument's sake they are: Why not support this provision anyway? It doesn't prevent auto dealers from handling loans, it simply provides oversight when they do. If the Federicos of the world are really providing better loans at reasonable rates, there's no reason why the Consumer Financial Protection organization won't simply give them an "attaboy" or "attagirl" and tell them to keep up the good work. (Attaboy, Tony!)

Or look at it the other way: If they're not doing anything wrong, why are they so concerned about a little oversight?

Auto dealers throw a lot of lucrative fundraisers back home for DC politicians. That's why 62 House Democrats have joined their Republican colleagues in pushing for an auto dealer exemption. That's the money talking. Talk back to it: Send a fax. Call your Senator and Representative. If you do, we can have you in a nice financial reform package, complete with consumer protections against auto dealer rip offs, probably by this time next week.

Heyyy ... what a deal.

(modified from a post prepared for the Curbing Wall Street project of the Campaign for America's Future)

DOWNLOADS: (1367)

PLAYS: (3587)

Embed

Sen. Scott Brown is starting to hear it from his teabagging supporters over his vote for the Senate Financial Reform Bill.

As quickly as they had latched onto his campaign four months ago, they repudiated him yesterday through a flurry of blog posts, editorials, and Facebook messages.

“His career as a senator of the people lasted slightly longer than the shelf life of milk,’’ said Shelby Blakely, executive director of New Patriot Journal, the media arm of the Tea Party Patriots, which includes various Tea Party groups around the country. “The general mood of the Tea Party is, ‘We put you in, and we’ll take you out in 2012.’ This is not something we will forget.’’
--
Brown’s crucial support infuriated critics who believed that the financial legislation will lead to a bigger and more intrusive regulation. Americans for Limited Government wrote an online editorial called “A Lamentation of Scott Brown.’’

Some of Brown’s former supporters posted blistering comments on his Facebook page. “Scott Brown is a turncoat and I am ashamed that I did so much campaigning on his behalf,’’ wrote one. Another former backer wrote, “I am hereby officially un-liking you.’’

Much of the criticism appeared to be coming from interests outside Massachusetts. If the right continues to be disenchanted by Brown, it could hamper his fund-raising, most of which came from out of state.

Christen Varley, president of the Greater Boston Tea Party, said she doesn’t think people are “ready to throw him under the bus . . . but there’s a lot of questions and a lot of chatter . . . and a lot of perplexed voters.’’

Brown has to win reelection so he can't just kowtow to the anti-government Tea Party crowd -- which means he'll side with the Dems on occasion, and that is going to be a problem for him. Was he ever a real Tea Partier? Sports Talk radio in Boston helped torpedo Coakley as much as anything else. He's more like a pinup poster hottie for the likes of Sally Quinn.

Digby writes:

Oh please. He'll probably lose his seat not because the teabaggers wield their mighty swords, but because he won on a fluke against a bad candidate in an off year with an electorate that was mad at the world. But hey never underestimate the arrogance of opportunists and charlatans. These guys will make a lot of money and help progressives defeat Brown, so I'm all for it.

Update: Speaking of Scott Brown, when I read Erick Ericksson's revealing remarks that hot women like Nikki Haley don't like ugly poor men, it occurred to me that many of the Tea Party heroes are pin-ups: Brown, Palin, Bachmann, Rubio. (Rand Paul is the exception --- not that he's particularly unattractive, but he's no Cosmo centerfold or beauty pageant winner.) Since Scott Brown was never actually a Tea Partier and Palin actually hails from the corporate/social conservative wing of the party, I'm guessing that these folks are just suckers for a pretty face.

Bill O'Reilly won't like this, but Al Franken is proving his moxie as a US Senator yet again.

This is an important measure to be passed:

This is a big victory for financial reform:

The Senate on Thursday voted to impose tighter regulations on credit-rating agencies, which have been criticized for misjudging the risks of debt instruments at the core of the 2008-2009 financial crisis.

The ratings services were tied to the banks that were using them so here's a tool stripped away that helps perpetrate corruption on Wall Street.

There's more:

Chris Bowers at Open Left had a good summary of the amendment this morning:

Making the bill stronger: Sen. Franken (D-Minn.) creates a Credit Rating Assignment Board which would assign the credit rating agency that does each initial rating in order to reduce the inherent conflict of interest in the current business model - where the person who hopes to sell the rated product pays the rater. This amendment stops securities issuers from shopping around among credit rating agencies for the best rating, leading raters to inflate their grades as they scrap for market share.

Why it matters: Credit Rating Agencies got paid to slap AAA ratings on packages of dangerous investments they did not even try to understand or evaluate. Their triple A ratings created huge markets for these investments, and spread them through every corner of the market. When the House of Cards built on their false promises collapsed, millions of Americans lost their savings.

The financial reform bill gets stronger and stronger by small increments. This is a good result. Let's hope there is more like it to come.

And the ratings agencies should be held accountable. That is unless this gets kicked to the Supreme Court, who will vote for big business every time with Roberts leading the way.

This week, CalPERS, the largest U.S. public pension fund, won a court ruling allowing it to proceed with a lawsuit accusing the three biggest rating agencies of assigning "wildly inaccurate and unreasonably high" ratings, causing $1 billion of losses. The agencies say they expect to eventually prevail on the misrepresentation claim.

The clearinghouse measure could give smaller ratings agencies a chance to challenge the dominance of the top three firms.

Judd Gregg strode to the Senate floor yesterday and denounced the provision in the Dodd bill to remove derivatives from banks and put them on their own exchange in the sunlight for everyone to see. Remarkably, he centered his argument around the irrationality of populist anger, which he likened to Argentina in the 50s and the Peron years.

You know, I have really been trying to figure out what's behind this type of language [derivatives sunlight], because it's so destructive to our competitiveness as a nation, really.

I mean, this is the type of thing, as I said earlier, you would have seen in Argentina that -- Argentina in the 1950s -- bashing on entities simply because they're large and because obviously there's a populist feeling against them, which ends up, by the way, significantly affecting Main Street in a negative way.

Look at Argentina in 1945 - 1937, somewhere in that period. They were the seventh-best economy in the world. 7th most prosperous in the world. Now they're like 54th or something.

It is because of this populist movement which has driven basically their ability to be competitive offshore.

So now we have this huge populist movement here. I'm trying to think, what really is the rationale here other than just rampant pandering to populism?

He follows that with this:

Is there anything in this country that gets broken up because there is an attitude that big is bad, whether it contributes or not, unless you happen to be big and union, in which case you get saved, as the UAW was able to work out for GM and Chrysler.

Senator Gregg is either arguing for a corrupt extreme right regime or he has not studied Argentina's history lately. Here's a quick review. Argentina's economy followed other emerging countries in the early 1900s. In 1920, it was the 7th largest economy in the world, but the Wall Street crash took a deep toll.

Unfortunately, the 1930s witnessed a reversal in the legitimacy of the rule of law in Argentina. To stay in power in the 1930s, the Conservatives in the Pampas resorted to electoral fraud, which neither the legislative, executive, or judicial branches checked. The decade of unchecked electoral fraud lead to the support of citizens for the populism of President Juan Peron and the impeachment of the majority of the Supreme Court. The aftermath of Peron has been political and economic instability, which partially accounts for the fall of Argentina from the top ten of income per capita countries in the world. Read more...(PDF)

Did Senator Gregg really intend to self-indict conservatives in our time and country by comparing today's populist anger to Argentinian populist anger?

There are many, many parallels between Argentine conservatives of the 1930s and American conservatives of today. None of them are complimentary and all of them imply a severe indictment on the corruption, money and greed that seems to drive conservative legislators.

What really stands out, though, is the utter cynicism of a conservative senator criticizing populist anger while his party is spending millions upon millions to capitalize on that same populist anger.