Consumer Financial Protection Agency
President Obama announced a series of proposals that would involve the government much more deeply in the private markets, from helping to steer consumers into affordable mortgage loans to imposing new limits on the largest financial companies, in a sweeping effort to prevent the kinds of risk-taking that sparked the economic crisis. More information at the Washington Post and The New York Times.
A fact sheet on the administration’s proposal can be viewed here.
Felix Salmon at Reuters posts his reaction. Arnold Kling at the Library of Economics and Liberty has a reaction posted here. Douglas Eliott at The Brookings Institution comments here. Here is an overview at The Economist. The Center for Economic and Policy Research has a reaction; ditto for The Competitive Enterprise Institute.
Rep. Carolyn Maloney (D-NY) issued this statement with respect to President Obama’s proposal. Mrs. Maloney is the chairperson of the Joint Economic Committee. Senator Dodd released this statement in his capacity as chair of the Senate Committee on Banking, Housing and Urban Affairs. Finally, Rep. Spencer Bachus (R-AL), the ranking Republican member on the House Financial Services Committee released this rejoinder on the Administration’s reform plan.
Regulatory Reform
An article at American Banker examines how the Obama administration’s proposal for financial industry regulatory reform could result in certain kinds of special purpose banks, such as retailer-owned credit card banks, being eliminated.
Senator Dodd has issued a blistering critique aimed at financial industry groups who have expressed opposition to the Obama administration’s proposal to create an independent consumer financial protection agency.
Meanwhile, WaPo columnist Steven Pearlstein adopts a wait-and-see attitude while Eliot Spitzer, former scourge of Wall Street, thinks the the plan doesn’t go far enough.
Finally Barney Frank has a full plate of hearings next week, shortly before Congress adjourns for its July 4th break. On Wednesday, June 24, 2009, there will be a hearing on consumer protection regulations. Although witnesses have not yet been announced, a spokesperson for Elizabeth Warren, the chair of the Congressional Oversight Panel and a noted expert on bankruptcy and credit card issues, said Warren is scheduled to appear. On Thursday, June 25, 2009, the full Financial Services Committee will hold a hearing on preserving affordable housing assistance at the state and federal levels; later, the Subcommittee on Financial Institutions and Consumer Credit will address financial literacy in the new regulatory regime. More information can be viewed here.
Economic Crisis
Adam Levitin blogs about the consequences for America’s economy that would ensue if a default occurred in the state of California.
Data Security
Network World has an article about the lack of concern that many companies demonstrate with respect to cloud computing.
The Cyberspace Policy Review released by the White House last month was only the beginning of an effort being driven by President Obama to reshape and strengthen the nation’s cybersecurity, according to this article by Federal Computing Review.
Computer World describes the positive efforts Heartland Payment Systems CEO Robert Carr is making on behalf of his beleagured company particularly in the wake of the massive data security breach suffered on January 20, 2009. Although HPS still faces litigation as a result of the breach, customer attrition has been minimal, and so too has the damage to the company’s reputation within the industry.
Micropayments
The idea of processing tiny transactions is enjoying a resurgence in mobile payments due to a pair of recent acquisitions made by Boku Inc. according to this article on Digital Transactions. This will allow handset users the ability to buy digital goods and charge the transactions to their wireless bills. This venture will also test what many observers see as the latent potential for mobile payments in these relatively nascent markets.
Identity Theft
The U.S. Government Accountability Office has released a report on the progress made in protecting personally identifiable information with respect to the general public in the public and private sectors, and the challenges that remain.
Credit Cards
Adam Levitin has commentary regarding this New York Times article on wavering credit card interest rates.
Credit card issuers are ramping up efforts to settle delinquent accounts for substantially less than the amount owed, according to this New York Times article.
Interchange Fees
Digital Transactions reports that the total number of pending bills in Congress relating to interchange fees now numbers three: (1) HR 2382, introduced by Rep. Peter Welch (D-Vt.) in May, (2) S 1212, introduced by Sen. Richard Durbin on June 9, 2009 and (3) HR 2695, introduced by Rep. John Conyers (D-Mich.) on June 4, 2009. The Durbin bill and the Conyers bill are the Senate and House versions of the Credit Card Fair Fee Act of 2009 respectively. The Welch bill would ban card networks from setting higher interchange rates for premium cards than for non-premium cards and would also overturn many networks’ rules that prevent merchants from discriminating against card-using customers. The Durbin bill revives the idea of a federal-payment system of judges to oversee the interchange rate setting between retailers and card networks.
Congressional Testimony
Here is a blow-by-blow account of Secretary Geithner’s testimony before the Senate Banking Committee that took place on Thursday, June 18, 2009. Related: Wall Street Journal columnist Michael Corkery posts five questions that Mr. Geithner should be thinking about with respect to the administration’s proposal to rewrite the country’s regulations governing finance. Related: American Banker has another account here.
You can view a video of the hearing here.
Privacy Rights and E-Commerce
Evan Schuman inquires into the need for retailers to set limits on marketing techniques that could be construed as invasive with respect to privacy rights.
Mobile Payments
MasterCard has launched its person-to-person payment service for mobile phones in the United States, according to this article on Digital Transactions. The service has one issuer on board and an indeterminate number waiting in the wings. The mobile version allows users to transfer funds on their handsets using text messaging, a mobile Web site or a downloadable application and works with any mobile phone.
U.S. Supreme Court
The Justices will have a private conference on Thursday, June 25, 2009, at which time several cases will be considered for review. One case that may be of interest and stands a good chance of being granted a writ of certiorari is American Bankers Association v. Brown (08-730). The issue at hand is whethwer the Fair Credit Reporting Act preempts the California Financial Information Privacy Act (Cal. Fin. Code Section 4050 et seq. (West Supp. 2009)), to the extent the state law restricts the exchange among affiliated financial institutions of information on consumers. The petition for certiorari can be viewed here, the brief in opposition here, the reply brief here and the supplemental reply brief here. In addition, here is a recent amicus curiae brief filed by the Solicitor General recommending that certiorari be denied.
Related Posts
- News Roundup — June 22, 2009 to June 26, 2009 - July 2, 2009
- News Roundup — June 1, 2009 to June 5, 2009 - June 8, 2009
- News Roundup — June 8, 2009 to June 12, 2009 - June 16, 2009
- News Roundup — September 28, 2009 to October 7, 2009 - October 7, 2009
- News Roundup — May 18, 2009 to May 29, 2009 - May 29, 2009
