Senate Approve Two Measures To Toughen Up Financial Overhaul Bill
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The Senate is continuing to put in place steps that show it is getting tough on Wall Street with two new initiatives approved on Thursday, including one that may cut off a substantial easy revenue generating source for big banks, and another that will address the role that ratings agencies played in the financial meltdown.
Boht proposals have been added to the financial regulatory overhaul that Democratic Senators hope to bring to a completion next week
One of the measures taken would have the Federal Reserve imposing new limits on the amount of fees that banks can impose on businesses for the use of credit and debit cards. The fees generated roughly $50 billion in revenue for banks last year.
This move was pushed by Democratic Senator of Illinois, Richard Durbin and is another clear signal of how deeply entrenched the regulators have become in making sure that banks are not able to bring down the economy again.
"I urge my colleagues, if they are listening to small businesses across America trying to survive, trying to add new employees, give them a helping hand," Durbin said in a floor speech on Thursday.
The other amendment is designed to adjust the ratings methods used, which prior to the financial crisis were a catalyst by giving top-notch ratings to toxic mortgage debt.
"We know that one of the main reasons why we had our financial debacle in 2008 was that credit agencies failed to do their jobs," Republican Senator of Florida, George LeMieux said on the floor. "They put AAA stamps of approval on products that deserve no such stamp."
The amendment is designed to prevent conflicts of interest by gathering initial assessments by randomly assigning the ratings agencies, which could also allow smaller ratings agencies to rival the major players in the industry.
The ratings powerhouses that would surely be impacted by this move include Moody's Investors Service (NYSE: MCO), Fitch Ratings and Standard & Poor's, owned by McGraw-Hill (NYSE: MHP)
Boht proposals have been added to the financial regulatory overhaul that Democratic Senators hope to bring to a completion next week
One of the measures taken would have the Federal Reserve imposing new limits on the amount of fees that banks can impose on businesses for the use of credit and debit cards. The fees generated roughly $50 billion in revenue for banks last year.
This move was pushed by Democratic Senator of Illinois, Richard Durbin and is another clear signal of how deeply entrenched the regulators have become in making sure that banks are not able to bring down the economy again.
"I urge my colleagues, if they are listening to small businesses across America trying to survive, trying to add new employees, give them a helping hand," Durbin said in a floor speech on Thursday.
The other amendment is designed to adjust the ratings methods used, which prior to the financial crisis were a catalyst by giving top-notch ratings to toxic mortgage debt.
"We know that one of the main reasons why we had our financial debacle in 2008 was that credit agencies failed to do their jobs," Republican Senator of Florida, George LeMieux said on the floor. "They put AAA stamps of approval on products that deserve no such stamp."
The amendment is designed to prevent conflicts of interest by gathering initial assessments by randomly assigning the ratings agencies, which could also allow smaller ratings agencies to rival the major players in the industry.
The ratings powerhouses that would surely be impacted by this move include Moody's Investors Service (NYSE: MCO), Fitch Ratings and Standard & Poor's, owned by McGraw-Hill (NYSE: MHP)
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