Financial Regulation: It's What I Want!

Let’s talk about money: http://www.youtube.com/watch?v=insVgcOVVDQ&feature=related

Amid the highest unemployment rate since the great depression, an expected additional 11% drop in housing prices, and a 6.5% increase in tuition at public colleges, you have to wonder who’s looking out for Joe the Plumber (who we heard so darn much about during the election) these days?

Here are a few pieces of legislation that are en route to the floor of the congress:

- House Majority leader Rep Steny Hoyer (D-MD) plans to introduce legislation that would attack the controversial Wall Street practice of short selling. Short selling, the practice of borrowing a security and selling it with the expectation the price will go down, allows the borrower to go back into the market and buy it back at a lower price before returning the security to the owner thus making a profit. Short selling was banned briefly after the stock market tumble. While this doesn’t sound so terrible, what you may not be aware of is that brokerage houses can use their customers’ shares in short selling without their knowledge. Hoyer wants to ensure that brokers are disclosing when they are using customers’ shares for short selling, and that the customers are appropriately compensated. http://news.yahoo.com/s/cq/20091020/pl_cq_politics/politics3226440

- Senator Sheldon Whitehouse (D-RI) is currently listening to arguments both for and against his bill, which would allow people forced into bankruptcy from medical bills to waive certain credit counseling requirements, would help them protect their homes from creditors, and give them the option of paying attorney fees at a later time. http://news.yahoo.com/s/ap/20091020/ap_on_go_co/us_bankruptcy_medical_bill

- Today, the House Financial Services Committee will vote on whether to establish the proposed Consumer Financial Protection Agency, and whether or not the agency will share regulatory power with individual states. The vote could potentially give states new authority to protect consumers through additional credit card and mortgage regulation. On the other hand, the bill also contains a provision through which banks could obtain exemptions from specific state laws if granted by federal regulators. (I’d love to know who will be granting those.) http://news.yahoo.com/s/ap/20091020/ap_on_go_co/us_financial_overhaul

- Congress is looking to extend a new homebuyer tax credit past November, the original expiration date. According to the National Association of Realtors, “The housing market would not have moved without this tax credit.” So why on earth wouldn’t we want to extend it!? Since the initiation of the program back in February, the IRS has 107,000 questionable claims cases related to the tax credit and has uncovered 167 criminal schemes. Damned. http://news.yahoo.com/s/ap/20091020/ap_on_go_co/us_tax_credit_problems

Well, I suppose all of those things are all well and good (or have the potential to be all well and good), but they feel like drops in a big, wide ocean of financial regulation mumbo-jumbo that don’t make much sense. I consider myself fairly well educated in the ways of the almighty dollar, but I have my doubts about whether or not I’ll be able to understand my mortgage even after all these fine laws are passed. Of course, that’s if I can even ever afford a mortgage at all. As always, thanks for your help Congress!