It's not often I find myself sympathetic to the plight of politicians - those in either party - but for reasons totally unbeknownst to me, I feel some empathy for outgoing Sen. Chris Dodd, D-Conn.
I stress "some," but more on that in a minute.
The chairman of the Senate Banking Committee earlier this year determined after 35 years in office not to seek re-election come November. Translation: His constituency in the Nutmeg State had grown tired of both him and his well-publicized ethics issues. Thus, after nearly four decades of public service, the voters in Connecticut will choose between the state's attorney general, Richard Blumenthal, who has recently come under fire for creatively recasting his biography, claiming to have served in Vietnam, when in reality he never left U.S. soil as a reservist, and GOP candidate Linda McMahon, chief executive of World Wrestling Entertainment, the low-brow organization that brought us such redeeming cultural icons as Triple H and The Executioner. I suspect that's not quite the succession plan Dodd envisioned. That's the sympathetic part.
But he may have the colloquial last laugh.
Dodd, as we know, spearheaded the introduction and subsequent passage of S.3217, the Restoring American Financial Stability Act of 2010, the Senate version of the financial reform bill. Although at press time the legislation still had hundreds of amendments pending, and House and Senate negotiators were headed for a reconciliation process (the House bill passed in December), it wasn't long before the inevitable tide of opinions began to flow, with the administration praising the bill, and Republicans somewhat less enthusiastic.
Dodd's legislation creates a Consumer Financial Protection Bureau within the Federal Reserve, instead of the stand-alone agency that currently resides in the House version. You can debate the merits of creating such an agency, but nowhere in the bill (at least that I've read) are proposals for consumer education, i.e., programs designed for people apparently uninterested or unable to understand terms like adjustable rate mortgages or zero percent financing. In fact, Dodd's bill doesn't even eradicate zero financing.
The bill eliminates the Office of Thrift Supervision - an irony perhaps lost on many of the younger folks who are too young to remember that the OTS was created in response to a past crisis - the savings and loan scandals of the 1980s. True to bureaucratic tradition, the measure guarantees that all OTS employees are given posts under the new alignment.
The bill's formation of a "Council of Regulators" does little to prevent banks borrowing obscene multiples of their assets, only a codicil that this group may make recommendations to the Federal Reserve about imposing more stringent standards. Nor does S. 3217 address the shameful performances and contributions to the housing crisis of Fannie Mae and Freddie Mac, both currently operating under government receivership and each of which has petitioned for billions to continue, in essence, losing money. It does, however, propose a "study" on the two bleeding concerns.
It also bestows greater authority on the Public Company Accounting Oversight Board to regulate the auditors of brokers and dealers, many of whom may not currently be registrants of the audit overseer.
I was always under the impression that reform as strictly defined was to amend and improve by change. I'm not convinced that S.3217 comes even close to that.
I, for one, won't miss Senator Dodd, but conversely, I'd hate to see the WWE's version of reform.
Bill Carlino
