Posted by
Buster Foghorn on Tuesday, February 02, 2010 2:15:27 PM
Hugh Hewitt posted an informative discussion from a confidential source [posted here at: Banker Guy] in the banking and mortgage business about the misguided Obama tax on phantom “massive profits” allegedly accrued by all of the banks. He further explained that the “Volker Rule announced by the President on January 21, 2010 does not produce real reform”and the new agency Mr. Obama wants to create [Consumer Financial Protection Agency (“CFPA”)]will not deal with the underlying reasons for the 2007 failures in the financial industry. Banker Guy also explains how exploding numbers of regulators and regulations are chilling business and limiting access to loans for customers and contaminating the business environment.
This insight from Banker Guy explaining why the Volcker Plan falls short seems to strike at the heart of the problem:
The law of requisite variety states that the solution must be a complex as the problem. There needs to be comprehensive reform that addresses “too big to fail”, capital requirements and leverage, and brings the shadow banking system under regulation. The CFPA does none of that. Instead it creates a czar that will add costs and make it more difficult for consumers to get financial products. Today at my bank we are attempting to be compliant with over 20 new laws and rules. All of this has only made getting a mortgage more difficult, more time consuming, and more costly.