Financial reforms fly in US House, flop in Senate Thu Apr 30, 2009 8:07pm EDT
By <http://blogs.reuters.com/search/journalist.php?edition=us&n=Kevin.Drawbaugh>Kevin Drawbaugh - Analysis http://www.reuters.com/article/reutersEdge/idUSTRE54001720090501 WASHINGTON (Reuters) - The final score was 1-1, consumers versus bankers, on Thursday as U.S. lawmakers voted on bills affecting credit cards and mortgage bankruptcy law. The votes in the House of Representatives and the Senate highlighted the political complexities facing the Obama administration and congressional Democrats as they pursue an ambitious agenda to reform financial regulation. Rich nations worldwide are tightening oversight of their financial systems to prevent future credit crises like the one currently dragging down economies worldwide. But progress in the United States has been only halting so far. "It's one step forward and one step backward," said Travis Plunkett, legislative director at the Consumer Federation of America, a public advocacy group. "Congress is moving in fits and starts to reregulate the financial services industry and the banking lobby still has tremendous clout," he said. The House, firmly under Democratic control, voted to approve a bill that would shield consumers from hidden credit card fees and sudden interest-rate hikes. The Senate is expected to consider a similar bill next week. House passage had been expected, but not the overwhelming 357-70 vote, which saw scores of Republicans cross over in support, handing the unpopular credit card business a rebuke. Banks affected include card industry leaders such as Citigroup Inc (C.N: <http://www.reuters.com/stocks/quote?symbol=C.N>Quote, <http://www.reuters.com/stocks/companyProfile?symbol=C.N>Profile, <http://www.reuters.com/stocks/researchReports?symbol=C.N>Research, <http://reuters.socialpicks.com/stock/r/C>Stock Buzz), Bank of America Corp (BAC.N: <http://www.reuters.com/stocks/quote?symbol=BAC.N>Quote, <http://www.reuters.com/stocks/companyProfile?symbol=BAC.N>Profile, <http://www.reuters.com/stocks/researchReports?symbol=BAC.N>Research, <http://reuters.socialpicks.com/stock/r/BAC>Stock Buzz), JPMorgan Chase & Co (JPM.N: <http://www.reuters.com/stocks/quote?symbol=JPM.N>Quote, <http://www.reuters.com/stocks/companyProfile?symbol=JPM.N>Profile, <http://www.reuters.com/stocks/researchReports?symbol=JPM.N>Research, <http://reuters.socialpicks.com/stock/r/JPM>Stock Buzz) and Capital One Financial Corp (COF.N: <http://www.reuters.com/stocks/quote?symbol=COF.N>Quote, <http://www.reuters.com/stocks/companyProfile?symbol=COF.N>Profile, <http://www.reuters.com/stocks/researchReports?symbol=COF.N>Research, <http://reuters.socialpicks.com/stock/r/COF>Stock Buzz). The American Bankers Association said congressional efforts on credit card rules need more work "to achieve the right balance between enhancing consumer protection and ensuring that credit remains available to consumers and small businesses at a reasonable cost." Representative Spencer Bachus, the top Republican on the House Financial Services Committee, said the credit card bill "will, in my view, make an already difficult economic situation worse. This bill will raise the price of credit for consumers and limit their access to credit." MORTGAGE CRAMDOWN DEFEATED In the more narrowly divided Senate, a bill that would let bankruptcy court judges alter the terms of mortgages to aid troubled homeowners was rejected 51-45, with several Democrats breaking ranks to vote against the measure. The Senate's rejection effectively kills the bill for now. From its start months ago, the real estate slump has hit some regions harder than others. That division was reflected in the Senate vote. Half of the Democrats who voted against the bill represent states with extremely low foreclosure rates. But the other half come from states where foreclosures are high, reflecting nothing more than the political power of the banking industry, Senator Charles Schumer, a New York Democrat, said in a statement. "It is confounding that the banks opposed this to the very end since the proposal would have helped them by finding a floor in the housing market. Clearly the banks had enough clout to defeat this bill, certainly more than the 1.7 million homeowners who would have been helped by it," Schumer said. Pennsylvania Senator Arlen Specter voted against the bill, known as the "cramdown" proposal because it would let judges reduce the principal levels on mortgages. Specter's dramatic party switch to Democrat from Republican this week had briefly elated financial reform advocates because it brought the Democrats one vote closer to Senate control. But on cramdown, at least, Specter was not a "game changer." Ginna Green, spokeswoman for the Center for Responsible Lending, a homeowner advocacy group, summed it up succinctly: "Today was a mixed bag. Consumers, one. Industry, one." --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to Mark Crispin Miller's "News From Underground" newsgroup. To unsubscribe, send a blank email to [email protected] OR go to http://groups.google.com/group/newsfromunderground and click on the "Unsubscribe or change membership" link in the yellow bar at the top of the page, then click the "Unsubscribe" button on the next page. For more News From Underground, visit http://markcrispinmiller.com -~----------~----~----~----~------~----~------~--~---
