So true. It has been this way forever I'm afraid. Not only the markets, but everything the feds are involved with. Washington is the seat of the new "Mafia", ie the federal government.
Barney Frank fears GOP will try to neuter watchdog agency
WASHINGTON (MarketWatch) — Former U.S. Rep. Barney Frank is worried that the new Republican Congress will try and weaken parts of his signature financial legislation that bears his name.
Emboldened by gaining a majority in the Senate during the closely watched midterm elections, incoming Majority Leader Mitch McConnell of Kentucky has said Republicans will take a look at the Dodd-Frank financial reform with an eye toward amending key components of the 2010 Dodd-Frank financial reforms.
Frank, the Massachusetts Democrat who helped write the law, said it is likely Republicans will attempt to de-fang the Consumer Financial Protection Bureau, a consumer watchdog agency stemming out of the Dodd-Frank financial reforms, and the brainchild of Sen. Elizabeth Warren, a Massachusetts Democrat, who briefly fostered the agency.
Frank told MarketWatch that the GOP will propose changing the CFPB from a single director, presently Richard Cordray, to one with multiple board members with varying party affiliations, akin to the Securities and Exchange Commission. GOP leaders, like Sen. Richard Shelby of Alabama, has argued that the CFPB’s power is unchecked (paywall).
“They’re going to try and insist they have a board instead of an individual,” Frank said in a phone interview, adding that Republican leaders will try to curtail the agency’s spending. The CFPB currently receives money from the Federal Reserve rather than congressional appropriations.
Now, as a new session of Congress is set to begin Tuesday, Shelby is likely to become chairman of the Senate Banking Committee. He declined to comment for this article.
Luke Bolar, a spokesman for Republican Sen. David Vitter of Louisiana, another member of the banking committee, said likely there will be a discussion about the Consumer Financial Protection Bureau in the coming session.
Frank also is worried that Republicans may attempt to alter tougher legislation related to the trading of complex derivatives, particularly a part of the law that allows regulatory agencies like the SEC to regulate derivatives trading of foreign affiliates of American banks. Critics argue that unchecked derivatives trading poses a risk to the global financial system.
“If we tell American banks your derivatives activities are subject to competition, we’ll give them an incentive to go overseas,” Frank said, also noting that foreign banking activities affect the U.S. economy.
The outcome of any attempts to amend Dodd-Frank are uncertain.
But Frank said Republicans’ hostility to the law would be a sticking point for compromise, leading to political jousting.
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