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A Round of Applause for the Senate… Maybe

July 13, 2010 Leave a comment

Stricter regulations coming.

Massachusetts Senator Scott Brown surprised many in the political world last night by announcing his intended support for Senate bill S.3217 – the Restoring American Financial Stability Act of 2010. Acting as a key political cross over, and joining two other Republican Senators, Mr. Brown’s support all but guarantees the 60 votes needed by Democrats to block any filibuster planned by Senate Republicans. The bill would be the most sweeping financial regulation in decades.

The three major facets of the proposed law will be strikingly visible to the public eye; a good thing for all Americans let alone the Democratic Party. The first authorizes a consumer protection agency that will deal with predatory credit card companies and credit lenders. This is a proactive and necessary change to a system that is completely inaccessible to the average American. The second will create a panel to watch over banks and investment firms and their use of derivatives. You remember those pesky financial instruments that made a major contribution to the economic meltdown, right? The final, and most important part of this bill would come into effect five years after passage. It will enact much more stringent regulations on banks and their debt to liquidity ratio; they must keep a much closer real money to debt balance. These are all steps in the right direction towards securing American financial stability.

The fact that Senator Brown, Senator Snowe and Senator Collins will come across the aisle on this issue is telling. These days, every issue is a political war-zone; with both sides taking potshots at each other. They must see enough merit in the measure, for every American, to risk the wrath of their constituents. So they all – especially Senator Brown, the oh-so-recent darling of the Republican Party – deserve a tip of the cap for breaking the deadlock and passing this vital bill.

Now, there is one caveat to all of this: the vote has not happened yet. In turn, these comments may be premature. When it does, though, expect a short comment from the Fodder. We’ll see if we still doff our caps.