Is America moving away from being a nation ruled by law to one ruled by men? That's the question senators should consider this week as they move to vote on Sen. Chris Dodd's financial reform legislation. How the legislation is finalized could have long-term adverse consequences on America's bankruptcy process.
Little thought has been given to that question in the rush to financial reform. But Senate and House legislation would discard 200 years of bankruptcy case law, replacing it with a special, one-of-a-kind resolution authority, managed by the Federal Deposit Insurance Corp.
The agency will soon have absolute authority over failing big banks, empowered to borrow up to 90% of the assets of the companies it seizes and provide unlimited guarantees to "solvent" institutions.
While providing the big banks with a permanent, codified source of bailout funds, the expanded powers of the FDIC will include its mediating with creditors. It will make decisions that bankruptcy judges, legal counsel and courts historically have made. An organization that was founded to provide insurance for depositors will now provide insurance for companies that are too big to fail.
Showing posts with label Chris Dodd. Show all posts
Showing posts with label Chris Dodd. Show all posts
Wednesday, May 19, 2010
Thursday, May 13, 2010
Government caused the bubble and the bust, but now wants to collect more data about you, the victims of its incompetence
Big Brother wants to watch you more closely. Especially how you spend your money.
His latest snooping plan comes from provisions in the banking bill being debated in the Senate. The bill is being pushed by Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee. Among other things, the bill is supposed to alert regulators to hazards in the industry to prevent another financial meltdown like the one that started in September 2008, and to make it easier to spot rip-off artists like Bernard Madoff.
The bill sets up two new supersnooping federal agencies to collect data on ordinary Americans:
•The Office of Financial Research. This supposedly would predict risk in the system by collecting massive amounts of new financial data, such as patterns of credit card use.
•The Consumer Financial Protection Bureau. It would collect data, especially on consumer transactions.
The data are supposed to be "scrubbed" of individual identifiers, so your privacy would be protected. But that might not work, Mark Calabria told us; the director of financial regulation studies at the Cato Institute formerly was a member of the senior professional staff of the U.S. Senate Committee on Banking, Housing and Urban Affairs.
"If you can link the data to courthouse records of housing sales," he said, then anyone can find data on others. "Much of this goes beyond what banks do now" to keep data. Under the new law, the government would detail "your charges at Macy's and car payments. It would be fairly detailed information."
Another problem, he added, is that the law "is extremely vague and empowering of the regulators. You as a consumer will have no opportunity to opt out. They'll be collecting, anyway, and you won't even know."
He noted laws on the books made illegal what Bernard Madoff did in his massive Ponzi scheme; and that the Securities and Exchange Commission repeatedly had been tipped off to Madoff, yet did nothing. So, no new laws are needed, just enforcement of existing fraud laws.
We would add that Rep. Ron Paul, R-Texas, warned in the early 2000s that the financial boom to a great extent was caused by the Federal Reserve keeping interest rates near zero, while printing too much money, which goosed the housing boom and made a bust inevitable. Yet the Fed, Congress and the White House refused to heed those warnings.
His latest snooping plan comes from provisions in the banking bill being debated in the Senate. The bill is being pushed by Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee. Among other things, the bill is supposed to alert regulators to hazards in the industry to prevent another financial meltdown like the one that started in September 2008, and to make it easier to spot rip-off artists like Bernard Madoff.
The bill sets up two new supersnooping federal agencies to collect data on ordinary Americans:
•The Office of Financial Research. This supposedly would predict risk in the system by collecting massive amounts of new financial data, such as patterns of credit card use.
•The Consumer Financial Protection Bureau. It would collect data, especially on consumer transactions.
The data are supposed to be "scrubbed" of individual identifiers, so your privacy would be protected. But that might not work, Mark Calabria told us; the director of financial regulation studies at the Cato Institute formerly was a member of the senior professional staff of the U.S. Senate Committee on Banking, Housing and Urban Affairs.
"If you can link the data to courthouse records of housing sales," he said, then anyone can find data on others. "Much of this goes beyond what banks do now" to keep data. Under the new law, the government would detail "your charges at Macy's and car payments. It would be fairly detailed information."
Another problem, he added, is that the law "is extremely vague and empowering of the regulators. You as a consumer will have no opportunity to opt out. They'll be collecting, anyway, and you won't even know."
He noted laws on the books made illegal what Bernard Madoff did in his massive Ponzi scheme; and that the Securities and Exchange Commission repeatedly had been tipped off to Madoff, yet did nothing. So, no new laws are needed, just enforcement of existing fraud laws.
We would add that Rep. Ron Paul, R-Texas, warned in the early 2000s that the financial boom to a great extent was caused by the Federal Reserve keeping interest rates near zero, while printing too much money, which goosed the housing boom and made a bust inevitable. Yet the Fed, Congress and the White House refused to heed those warnings.
Saturday, March 21, 2009
Countrywide bent own rules to favor Chris Dodd
"An executive at mortgage giant Countrywide Financial overrode the company's loan-writing policies to give a discount to Sen. Christopher Dodd, the powerful chairman of the Senate banking committee, according to an internal Countrywide document turned over to congressional investigators and obtained by The Courant.
But paperwork, e-mails and other loan documents reviewed as part of the congressional probe include no direct evidence that Dodd was aware at the time that he was getting a discount, according to a source familiar with the investigation.
And a Dodd spokesman Thursday repeated the senator's contention that there was nothing in the negotiation or loan process that was unusual or out of the ordinary.
Dodd, who refinanced two mortgages with Countrywide in 2003, has said that he did not know that he had been placed in a special group of customers known as "Friends of Angelo" — a reference to Countrywide CEO Angelo Mozilo — or that he might have received preferential loan terms. Internal Countrywide documents do not contradict that assertion, a congressional source said."
http://www.courant.com/news/politics/hc-dodd-countrywide-0320.artmar20,0,5251192.story
But paperwork, e-mails and other loan documents reviewed as part of the congressional probe include no direct evidence that Dodd was aware at the time that he was getting a discount, according to a source familiar with the investigation.
And a Dodd spokesman Thursday repeated the senator's contention that there was nothing in the negotiation or loan process that was unusual or out of the ordinary.
Dodd, who refinanced two mortgages with Countrywide in 2003, has said that he did not know that he had been placed in a special group of customers known as "Friends of Angelo" — a reference to Countrywide CEO Angelo Mozilo — or that he might have received preferential loan terms. Internal Countrywide documents do not contradict that assertion, a congressional source said."
http://www.courant.com/news/politics/hc-dodd-countrywide-0320.artmar20,0,5251192.story
Friday, March 20, 2009
Chris Dodd feeling the heat for financial fiasco
"Democrats may want to start thinking about a bailout for Senate Banking Committee Chairman Christopher Dodd, whose political stock has slipped amid the financial meltdown.
As a five-term Democrat who blew out his last two opponents by 2-1 margins in a blue state that President Barack Obama won handily, Dodd, D-Conn., should be cruising to re-election in 2010. Instead, he's feeling heat from a Republican challenger eager to make him a poster boy for the tumult in the housing and financial markets.
A recent poll showed former Rep. Rob Simmons running about even with Dodd, a former national Democratic Party chairman."
http://townhall.com/news/politics-elections/2009/03/20/dodds_political_stock_tumbles_in_connecticut
As a five-term Democrat who blew out his last two opponents by 2-1 margins in a blue state that President Barack Obama won handily, Dodd, D-Conn., should be cruising to re-election in 2010. Instead, he's feeling heat from a Republican challenger eager to make him a poster boy for the tumult in the housing and financial markets.
A recent poll showed former Rep. Rob Simmons running about even with Dodd, a former national Democratic Party chairman."
http://townhall.com/news/politics-elections/2009/03/20/dodds_political_stock_tumbles_in_connecticut
Sunday, February 22, 2009
How Chris Dodd got lucky before Countrywide
"Ireland does not easily give up its secrets. That may have been one attraction it held for Sen. Christopher Dodd in 1994 when he became an owner of a refuge on nearly 10 acres on the Irish west coast.
The murky tale includes a felonious inside trader, a Kansas City businessman, a presidential pardon and what appears to be a financial bonanza to Dodd during the Irish property boom.
The saga of Dodd's lucrative Irish odyssey reveals that his two 2003 sweetheart loans from subprime mortgage titan Countrywide Financial were not the first time he enjoyed a financial advantage from a wealthy benefactor. The trail begins at one of New York's most desirable addresses."
http://www.courant.com/news/opinion/op_ed/hc-rennie0222.artfeb22,0,4471645.column
The murky tale includes a felonious inside trader, a Kansas City businessman, a presidential pardon and what appears to be a financial bonanza to Dodd during the Irish property boom.
The saga of Dodd's lucrative Irish odyssey reveals that his two 2003 sweetheart loans from subprime mortgage titan Countrywide Financial were not the first time he enjoyed a financial advantage from a wealthy benefactor. The trail begins at one of New York's most desirable addresses."
http://www.courant.com/news/opinion/op_ed/hc-rennie0222.artfeb22,0,4471645.column
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