The Bad CHOICE Act – Dodd-Frank Alternative

The Bad CHOICE Act

posted by Adam Levitin

ADAM LEVITINI’m testifying before House Financial Services tomorrow regarding the “CHOICE Act,” the Republican Dodd-Frank alternative.  My testimony is here.  It’s lengthy, but it doesn’t even cover everything in the CHOICE Act–there are just too many bad provisions, starting with the idea of letting megabanks out of Dodd-Frank’s heightened prudential standards in exchange for more capital, then moving on to a total gutting of consumer financial protection, and ending with a very poorly conceived good bank/bad bank resolution system executed through a new bankruptcy subchapter.  The only good thing about the Bad CHOICE Act is that it has little chance of becoming law any time soon. 

Reblogged from Credit Slips – Read More HERE.

Excerpt: “The CHOICE Act also has numerous provisions that make it difficult for the SEC to pursue enforcement actions and achieve meaningful relief. These provisions reduce the SEC’s deterrence ability and thereby embolden financial fraudsters whose malfeasance can reverberate throughout the financial system. Among other provisions, the CHOICE Act:

  • requires the SEC to make additional findings before levying civil monetary penalties against issuers.24 Thus, while the CHOICE Act increases financial fraud penalties with the one hand,25 with the other it ensures that those penalties will rarely be imposed.
  • repeals the SEC’s authority to issue officer and director bans.26 This means that even the worst fraudsters will continue to be able to participate in securities markets.
  • eliminates automatic bad actor disqualification from securities law exemptions even for firms that have been convicted of felonies. Apparently a convicted felon cannot be trusted with the right to vote, but can be trusted with pension funds and retirees’ savings. [CHOICE Act § 419]”
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OneWest “is not above the law” – No Merger For You! Bravo Helen Kelly!

OneWest “is not above the law,” said Helen Kelly, a 67-year-old former Minnesota state prosecutor that spoke out during a public hearing on a proposed merger with CIT Group and asserted she encountered difficulties with the lender when she wanted to modify the terms of her mortgage on her Pleasanton, Calif., house. She then compared bankers to an “Ebola virus” that had spread to contaminate homeowners.

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Little to NO Sympathy for Big Banks – New York Times

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NYT no sympathyIt’s no fun to be a banker these days. It is not just the increased regulation. It’s the lack of trust.

“At what point does this stop?” asked Gary Lynch, the former director of enforcement for the Securities and Exchange Commission who has gone on to jobs with many leading Wall Street firms and is now global general counsel at Bank of America.

He was referring to the escalation in penalties being levied on banks, culminating in the $13 billion JPMorgan Chase was forced to pay for a series of transgressions. Continue reading

While you were Trick or Treating – so were the Banks on Capitol Hill

While you were tacking on the last sequins of the Halloween costume and watching the World Series – the banks were handing out cash for votes to scale back the Dodd-Frank Wall Street reform law. You probably didn’t hear about it because after that the TSA shooter dominated the news. Another special from “Whaddah I miss?”

s_500_opednews_com_0_financial-derivative-jpg_56223_20130104-458The U.S. House of Representatives voted last Wednesday to scale back a much-debated provision of the Dodd-Frank Wall Street reform law, handing bank lobbyists a token victory in their fight against the tougher rules. The much-debated provision centered around derivatives. Those fighting the foreclosure wars need not be told the “devil is in the derivatives.” Continue reading

The Armageddon Looting Machine: The Looming Mass Destruction from Derivatives

TruthDig posted the latest Ellen Brown, Web of Debt examination of the financial market.

highrisk-435x235The Armageddon Looting Machine: The Looming Mass Destruction from Derivatives

Five years after the financial collapse precipitated by the Lehman Brothers bankruptcy on September 15, 2008, the risk of another full-blown financial panic is still looming large, despite the Dodd Frank legislation designed to contain it. As noted in a recent Reuters article, the risk has just moved into the shadows: Continue reading

“The U.S. has serious issues but you need to acknowledge them to fix them,” Dimon says.

“Too Big to Manage, Too Big to Operate.” –U.S. Senator Sherrod Brown of Ohio.

Just in case no one in the United States Senate understands the difference between “risk” and “fraud” – below are the definitions.  JPMorgan Chase Chief Executive Jamie Dimon tells the Senate Banking Committee what he has learned from the bank’s more than $2 billion trading loss.  June 13, 2012

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