long impasse between the SEC and banks regarding the appropriate interpretation

evince said:
http://economistsview.typepad.com/ec...level-pre.html




Thursday, February 14, 2008


State Level Predatory Lending Rules Were Blocked



Eliot Spitzer says some states tried to pass rules to limit predatory lending, but the Bush administration blocked the efforts:


Predatory Lenders' Partner in Crime: How the Bush Administration Stopped the States From Stepping In to Help Consumers, by Eliot Spitzer, Commentary, Washington Post: Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. ... These ... practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets. ...

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? ... Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents...

The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks..., an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration... In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit... Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. ..
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republican party dick sucking is your specialty
 
In 1999, the lawmakers adopted the Gramm-Leach-Bliley Act, which broke down the Depression-era restrictions between investment banks and commercial banks. As part of a political compromise, the law gave the commission the authority to regulate the securities and brokerage operations of the investment banks, but not their holding companies.

In 2002, the European Union threatened to impose its own rules on the foreign subsidiaries of the American investment banks. But there was a loophole: if the American companies were subject to the same kind of oversight as their European counterparts, then they would not be subject to the European rules. The loophole would require the commission to figure out a way to supervise the holding companies of the investment banks.

In 2004, at the urging of the investment banks, the commission adopted a voluntary program. In exchange for the relaxation of capital requirements by the commission, the banks agreed to submit to supervision of their holding companies by the agency.
 
evince said:
The FRB and the SEC approved Regulation R ("Final Regulation R") implementing the bank broker push out provisions under Title II of the Gramm-Leach-Bliley Act of 1999 ("GLBA"). A bank or thrift (collectively, a "bank") must start complying with Regulation R on the first day of the bank’s fiscal year starting after September 30, 2008, which for many banks will be January 1, 2009.

Regulation R was proposed by the FRB and the SEC jointly in an effort to resolve a years-long impasse between the SEC and banks regarding the appropriate interpretation of 11 statutory exceptions in the GLBA. The exceptions were intended to preserve bank activity after Congress repealed the blanket bank exception from broker regulation. The repeal was long-sought by the SEC in order to provide for functional SEC regulation of bank broker activities in response to banks’ entry into broader financial services securities activities, including the retail sale of mutual funds, in the 1980s.

To provide greater certainty to banks, the SEC made several attempts to issue regulations (proposed Regulation B in 2004 and the Bank Broker-Dealer Interim Final Rules in 2001) – these attempts were criticized by banks, banking agencies, and some members of Congress. Last fall, in adopting the Financial Services Regulatory Relief Act of 2006, Congress required the SEC to withdraw its rules and issue new rules jointly with the FRB in consultation with the other federal banking agencies.

Final Regulation R generally reflects proposed Regulation R, but also addresses banks’ concerns regarding legal and enforcement risk and contains further easing of bank regulatory burden in discrete areas, notably the "chiefly compensated" income test for exempted trust/fiduciary activity, the types of referral compensation permitted under the networking exemption, the scope of exempted custody activity, sweeps of deposit funds collected by another bank, and exempted transactions in variable insurance products effected with an insurance company.

Significant changes made by Regulation R, in comparison with previous proposals, are summarized below.



http://www.mondaq.com/unitedstates/x...e+Regulation+R
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post 2 in his thread



oopps your a liar
 
Superfreak said:
Post 125 above... in addition this one.

I listed the rules. I have asked you 1000 times to state the SPECIFIC rule(s) that would have prevented the crash. YOU NEVER answer it.
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post 2 in this thread posted 2 years ago


and here you are sill claiming what?
 
evince said:
post 4 in this thread
did you ever answer
not in 2 years
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1) For one retard, I have never stated that the rules were meaningless, so the above is a straw man. One that you have been using for years.

2) Second, I understand each of the rules... how they work, what they mean. YOU do not. Which is why I want you to point to the rule you THINK would have stopped the crash. But you can't... because you don't even understand what they mean.
 
Superfreak said:
No, I am not. But you did just prove that you are a moron.

Now... can you tell us what portion of Reg R would have stopped the crash?
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why are you continuing to lie about this?



you never answered me about why he banks fight these laws so hard if they were unimportant like you claim

you have had 2 years to think of something
 
Superfreak said:
1) For one retard, I have never stated that the rules were meaningless, so the above is a straw man. One that you have been using for years.

2) Second, I understand each of the rules... how they work, what they mean. YOU do not. Which is why I want you to point to the rule you THINK would have stopped the crash. But you can't... because you don't even understand what they mean.
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you keep saying you know all about it.


then make your case

lay it out


you never have
 
evince said:
you keep saying you know all about it.


then make your case

lay it out


you never have
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LMAO... yes desh... I have. None of the rules that you CLAIM would have stopped the crisis would have. If you care to prove me wrong, then by all means... LIST the fucking rule that you THINK would have stopped it.

You keep running away from answering that. NONE of them would have prevented the crisis. NONE.

Yet YOU claim otherwise, then you run away from stating WHICH rule.
 
Section 218.700 and Section 247.700 Defined terms relating to the networking exception from the definition of broker
The networking exception in Section 3(a)(4)(B)(i) of the Exchange Act permits bank employees that are not registered representatives of a broker-dealer to refer customers to a broker-dealer subject to several conditions. One of these conditions generally prohibits a bank employee that refers a customer to a securities broker-dealer from receiving "incentive compensation" for a securities brokerage transaction other than a "nominal" one-time cash fee for making the referral that is not contingent on whether the referral results in a securities transaction. Rule 700 defines key terms used in the networking exception, including the terms "incentive compensation" and "nominal one-time cash fee of a fixed dollar amount." Rule 700 includes four different alternatives for satisfying the requirement that a referral fee be "nominal." These alternatives include a flat $25 standard (to be adjusted for inflation) and other standards based on the employee's actual base hourly or annual compensation or the base hourly or annual compensation associated with the employee's job family. The definition of "incentive compensation" in Rule 700 includes exclusions from that definition for certain types of bank bonus plans.
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Would the above have prevented the crash desh?
 
How about this one...

Section 218.701 and Section 247.701 Exemption from the definition ofbroker for certain institutional referrals
Rule 701 permits a bank, subject to a variety of conditions, to pay an unregistered employee a higher-than-nominal, contingent fee for the referral of an "institutional customer" or a "high net worth customer" to a broker-dealer. Rule 701 defines certain terms, including "institutional customer" and "high net worth customer," and sets forth the conditions that apply to a bank making referrals under this section.
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What about this one...

Section 218.721 and Section 247.721 Defined terms relating to the trust and fiduciary activities exception from the definition of broker
Section 3(a)(4)(B)(ii) of the Exchange Act permits a bank, under certain conditions, to effect securities transactions in a trustee or fiduciary capacity without being registered as a broker. The Exchange Act provides that a bank must be "chiefly compensated" for effecting securities transactions for trust and fiduciary accounts by certain types of fees, which are defined as "relationship compensation" by the rule. Rules 721 and 722 allow banks to use one of two approaches to calculate compliance with the chiefly compensated test: an account-by-account approach or a bank-wide approach. Rule 721 explains how a bank using the account-by-account approach must monitor its compliance with the chiefly compensated test. Rule 721 also provides examples of the type of fees that qualify as "relationship compensation" and provides the conditions a bank must comply with in order to rely on the trust and fiduciary exception, such as restrictions on the bank's advertisement of its securities activities for its trust and fiduciary accounts.
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