de novo
Economists View has a note on the evolving ideas of what ‘financial’ reform looks like in Congress.
It looks like de novo is back, and it was Barney Frank who pulled it in the first place. (h/t run)
it appears Rep Frank put de novo branch banking back into the House Bill (HR4173) which just passed as shown in the December 10
COMMITTEE ACTION: REPORTED BY A RECORD VOTE OF 8-3 on Thursday December 10, 2009.FLOOR ACTION:
SUMMARY OF AMENDMENTS TO BE MADE IN ORDER
Frank (MA) item 12: “Would eliminate the current disparity between banks and thrifts by allowing for nationwide de novo interstate branching for all federally insured depository institutions. 12)”
Branch banking had little or no role in the recent troubles.
There are problably too many branches in some areas, but that is peanuts compared to the casino trading operations that crashed the economy.
rusty:
As I have written below; the issue has more to do with the regulation of branch banks within the state that are chartered in other states and are considered National Banks. Often times states have stricter laws than federal law. This act nullifies any state regulation beyond this act. Lack of action and supervision by the FED, OTS, FDIC, Office of the Comptroller, and other government authorities of banks and investment firms is what got us into trouble. There is no reason to expect them to be different with more authority granted to them now.
Perhaps I should explain:
– The same as the striking down of state Usury Laws by SCOTUS in Marquette vs First Omaha and the establishment of South Dakota as the Credit Card capital of the world; as it is written, this act goes one step further in eliminating any state regulation of National Banks beyond Federal Laws. States will no longer be able to have tougher laws than the Federal law to control the acts of banks. It opens up the door for TBTF to proliferate even more. Some disparities . . . 4 banks (Citi, WF, BofA, Chase) control 39% of all Deposits . . . $3.8 trillion on the commercial side only and not including the investment side. 2/3rd of the credit card market is control by Citi, BofA, and Chase. Think they need more help?
– Cram Down provisions were removed which allowed bankruptcy courts to interfere with the terms of mortgages when in Bankruptcy Court. This lost in the House in a separate vote 241-188. Sure glad we have Dems protecting our butts. God-forbid the mortgage loan sharks have to reduce their take. Again a concession to TBTF.
– Retailers, auto dealers, lawyers, and real estate brokers are exempted from the new consumer agency overview.
– 8000 banks with assets < $10 billion are exempted from examination by the new consumer agency or to paying fees to it. How many of the 132 failed banks today had assets >$10 billion?.
– It has little provision for the dismantling of TBTF banks.
– Provisions for plain vanilla products such as mortgages and credit vards were dropped (Geithner push on this).
Frank and Pelosi in proudly announcing the passage of this bill are engaging in deception and pandering to the constituency. I do not have much hope for the Senate as Senator Debbie Stabenow is side stepping my questions. More later.
Casino trading is not a meaningful financial term.
This discussion has been around since pre-emption by feds as the OCC and Thrift sidestepped state law on banks….I for one do not want law in Texas protecting me as a consumer in MA.
NOte that the 10% deposit limit limits how much wells fargo and Bank of America can do this. So of the big guys is JP Morgan (less since WaMu) and Citi that can do it. The amendment is aimed more at the second tier banks. Anyway as a consmer you can still choose a credit union, and thumb you nose at the banks.