I was sorry to see newly-elected Massachusetts Senator Scott Brown vote to end the debate on the Financial Reform Bill. My local paper reports that Senator Brown changed his vote "after receiving promises from Senate Majority Leader Harry Reid on issues related to Massachusetts." We shall see how much Senator Reid's promises are worth.
Anyway, Jim Kuhnhenn at Townhall.com posted a summary of the bill today. There are some positive aspects of the bill--if they are properly enforced. One of the things that caused the mortgage meltdown was banks being pressured by groups such as ACORN to issue mortganges to people that would not be able to pay them back. If this bill ends the ability of such groups to exert that kind of pressure, that will be helpful. In the bill, borrowers will be required to show proof that they will be able to make their mortgage payments and lenders would be prevented from raising interest rates to impossible-to-pay levels. These are steps in the right direction.
The biggest flaw in the bill is that it does nothing to rein in Fannie Mae and Freddie Mac. In the first quarter of 2010 Freddie Mac has lost $8 billion. It has requested another $10.6 billion from the government and stated that it would need more in the future. This is something that should have been dealt with in the bill.
The Senate version of the bill does eliminate the 'too big to fail' fund. The House is supposed to take its fund out during the reconciliation process.
This was far from a perfect bill, and I need to see how intrusive it is before I can actually support it. There were many questionable ideas in its formation, and I am not aware of how many of them have been taken out. It seems as if Congress really does have to pass a bill in order for any of us to know exactly what is in it.
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