Corporate Governance

The Bumpy Road to Recovery

By Tamar Weinrib

As our country is seeking to heal its economic wounds, we are constantly witnessing the reasons why we?ve arrived at this crisis in the first place.  It is not only gargantuan bonuses and greedy CEOs that are frustrating the recovery, but also the $224 million spent by the financial industry in the first half of this year to lobby Congress to water down regulations aimed at preventing another financial meltdown.  The need for reform is clear.  What is unclear is who will win the battle over what shape reform should take.  As Alan Blinder described in a recent New York Times op-ed, "The money at stake is mind-boggling, and one financial industry after another will go to the mat to fight any provision that might hurt it." Included on the anti-reform side of the playing field is the U.S. Chamber of Commerce.  One crucial debate is over the proposed Consumer Financial Protection Agency (CFPA).  The idea of the CFPA is to consolidate federal consumer regulation under one authority.  To date, the Chamber of Commerce, which has consistently championed itself as a proponent of reform, has spent approximately $2 million on efforts to kill the agency. 

The government has repeatedly asserted that regulatory overhaul is needed to protect us from another financial disaster.  Most recently, President Obama attacked the Chamber of Commerce for its anti reform efforts and claimed that its ads attacking the CFPA are completely false.  The Chamber of Commerce has claimed that the scope of the CFPA powers are too broad, extending well beyond companies that are principally engaged in financial services.  According to Obama, the CFPA would only affect businesses that offer financial services and would have "just one mission: to look out for the financial interests of ordinary Americans." 

Full post as published by PomTalk on October 19, 2009 (boomark / email).