The financial reform legislation passed in the House on December 11, 2009 is now in the Senate.

The Democrats in the Senate have produced a new version, which can be found here.

The House version (which surely will not be passed into law in this form) is comprised of more than 1,700 pages and includes eleven separate bills (in the order of their appearance):

  • Financial Stability Improvement Act of 2009
  • Dissolution Authority for Large, Interconnected Financial Companies Act of 2009
  • Corporate And Financial Institution Compensation Fairness Act
  • Derivative Markets Transparency and Accountability Act
  • Consumer Financial Protection Agency Act
  • Private Fund Investment Advisers Regulation Act
  • Accountability and Transparency in Rating Agencies Act
  • Investor Protection Act
  • Federal Insurance Office Act
  • Mortgage Reform and Anti-Predatory Lending Act
  • Non-admitted and Reinsurance Reform Act

It amends at least twenty existing acts, including all of the major federal securities laws and most federal laws dealing with mortgages. It abolishes the Office of Thrift Supervision (folding it into the Office of Comptroller of Currency), mandates many GAO reports to Congress, various studies and regulations and creates a host of new federal offices, agencies and boards, including (but not limited to):

  • Financial Services Oversight Council
  • Consumer Financial Protection Agency/Consumer Financial Protection Oversight Board (which looks a lot like the organizational structure of HUD)
  • Capital Markets Safety Board
  • Federal Insurance Office
  • Office of Housing Counseling (within HUD)
  • Office of Dissolution (within FDIC)
  • Systemic Dissolution Authority (subsidiary of FDIC)
  • Council of Inspector Generals on Financial Oversight

The bill vastly increases the responsibilities and authorities of the Federal Reserve Board and the Securities Exchange Commission and the workload of the General Accountability Office. It establishes federal authority to examine, collect data from, require registration of or increase federal regulation of municipal financial advisers, appraisers, accountants, mortgage brokers, foreign investment advisors, swaps dealers, non-bank financial companies, asset-backed securities issuers and underwriters, stock brokers, mortgage originators and credit rating agencies, thereby centralizing control of the remaining financial professionals who until now were subject primarily to state control. The legislation increases the ability of separate federal agencies to share information with foreign regulators, state regulators and other federal agencies but purports to protect confidentiality and privacy of individuals and corporations subject to increased reporting requirements (perhaps making it more difficult for the media and watchdog groups to obtain information under the Freedom of Information Act). In short, it provides for collection of more data by the federal government (and, of course, the private contractors the federal government will surely hire to manage its systems) than is made accessible to the public.

Generally, this legislation takes over for the federal government many functions currently held exclusively by the states and only in a few cases provides additional power to the states (e.g., in regulating mid-sized financial advisers and enforcing the Truth in Lending Act). In the name of transparency, more federal databases are established (e.g., a consumer complaint website and database at the Consumer Financial Protection Agency, disclosure websites and databases by nationally recognized credit rating agencies, a default and foreclosure database by HUD, a national producer database for information on non-admitted insurance products, a HUD website on methodology for calculating net present value for applicants for loan modifications through the HAMP program and a database reporting progress of lenders in processing HAMP loan requests (eventually to the individual record level)).

Read the 41-page summary prepared for Solari, Inc. of the provisions of legislation adopted in the House of Representatives that is over 1,700 pages long and covers a wide selection of subjects and laws related to financial legislation.

Download and print the PDF version of this report

The actual bill can be found at the web site of the House Committee on Financial Services




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