White House Sends Volcker Rule To Congress

Attempts to fashion a bi-partisan banking reform and consumer protection ran in to negative reaction by Republicans on the Senate Banking Committee as the Obama Administration weighed in on the negotiations. The Volker Rule, which insists on limiting proprietary trading by commercial banks, and placing limits on the size of financial institutions deemed "too big to fail" is part of a policy proposal first raised in January 2010 by the Obama Administration. Furthermore, the Administration is insisting on strong consumer protections in any overhaul bill.

Opponents of the efforts to establish a separate, independent consumer protection agency are arguing that another level of government oversight is unnecessary, and want to give control of consumer protection to the Fed.  The reaction from House Financial Services Committee Chairman, Barney Frank, D. Mass., was quick and negative. Quipped Frank: "It's like making me the chief judge of the Miss America contest."  Frank insists that the Fed has had consumer protection authority since 1994 when Congress instructed the Fed to protect consumers from sub-prime loans. Then Fed Chairman, Alan Greenspan decided that the Fed could ignore the rules. Frank is insisting that the bill as being fashioned in the Senate isn't coming to the House of Representatives. According to Frank, " They better vote on this in the Senate. If they want to kill consumer protection, there better be 41 Jim Bunnings over there."