Framing the Dialogue

Congress acts, but bank bill has work ahead

In this series I choose a current news article and you decide via a multiple choice format which terms were used and whether others would have been more accurate…….

WASHINGTON — In the end, it’s only a beginning.

The __________ (comprehensive, far-reaching, power grabbing, socialist) new banking and consumer protection bill awaiting President Barack Obama’s signature now shifts from the politicians to the technocrats.

The legislation gives regulators __________( latitude, unlimited power, control, plenty of campaign contributions)  and time to come up with new rules, requires scores of studies and, in some instances, depends on international __________ (approval, loans, agreements, scorn) falling into place.

For Wall Street, the next phase represents continuing __________ (uncertainty, profit, demonetization, losses). It also offers banks and other financial institutions yet another opportunity to _________ (make poor decisions, become too big to fail,  influence, ship money overseas) and __________ (shape, circumvent, write, ignore) the rules that govern their businesses.

In hailing the bill’s passage in the Senate on Thursday, Treasury Secretary Timothy Geithner __________ (crowed, boasted, lamented,acknowledged) that implementing the new __________ (law, government control, regulations, power grab) will take time.

“But we are determined to move as quickly as we can to provide clarity and certainty,” he said.

Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee, _________ (voted for, stopped, criticized, filibustered) the bill as not “real reform,” saying it doesn’t address the problems of mortgage giants Fannie Mae and Freddie Mac, whose __________ (illegal, questionable, criminal, shocking) lending helped __________ (start, begin, facilitate, create) a collapse in the housing market.

Speaking on ABC’s “Good Morning America,” he also complained the bill creates a(n) _________ (imbalance of power to the Exective Branch, massive bureaucracy, doesn’t have enough pork, uncertainty) but doesn’t create jobs.

Among the first impacts of the bill, which Obama is expected to sign as early as Wednesday, will be the immediate creation of a __________ (Star Chamber of Czars, 10-member Financial Stability Oversight Council, Commission of former Democrat legislators who “retired” to spend more time with family, Chicago Political “Mob“), a powerful assembly of regulators chaired by the treasury secretary to keep __________ (watch, control, tabs, control, control) over the entire financial system.

The Obama administration has one year to create a new Bureau of Consumer Financial Protection. Congress will keep its __________ (wallet, resume, Barney Frank, eye) on that agency, eager to see whom Obama chooses as its __________ (czar, dictator, Michele Obama, director). The agency will have vast __________ (budget, number of employees, powers, extra-contitutional powers) to enforce regulations covering mortgages, credit cards and __________ (other, all, most, everybody’s)  financial products.

One of the candidates often mentioned for the top consumer spot is Elizabeth Warren, a (member of the Chicago Political Machine, Harvard Law School professor, friend of Michele, Socialist) who was among the first to suggest the creation of an agency to _________ (control, screw up, create numberous regulations, safeguard) consumers in their financial transactions. Warren heads the Congressional Oversight Panel, which has been a watchdog over the Treasury Department’s bank bailout _________ (fund, party fund, uncontrolled cash box, slush fund). Others mentioned include Michael Barr, an assistant treasury secretary who has been one of the architects of the administration’s regulatory _________ (take over, plan, power grab, initiatives).

But while the oversight council and the consumer bureau might bloom swiftly, other central provisions of the bill will take time, in some cases years, to take __________ (root, control, over, complete control).

The consumer bureau, for instance, has as long as 30 months after it is created for its regulations on predatory lending to take _________ (profits, control, effect, complete control). The legislation calls for a two-year __________ (study, spending spree, hiatus until after BHO’s re-election, under cover period) before regulators write rules on how risk-rating agencies should avoid any __________ (congressional oversight, transparency, paper trails, conflict of interes)t with the firms whose financial products they _________ (assess, control, control, control).

The Fed has until April to derive standards to measure the _________ (redistribution, fairness, control, taxation) of fees charged by banks to merchants for customers who use debit cards. And regulators will have to __________ (fine tune, control, take their cut of, hide) the broad restrictions in the legislation for the complex derivatives market. Key will be (threatening, controlling, prodding, determining) what firms and corporations will face new restrictions.

The U.S. Chamber of Commerce counts more than __________ (75, 135, 275, 350) rules that the legislation directs regulators to write. Senate Banking Committee Chairman Christopher Dodd, a(n) _________ (person responsible for the housing downturn, beneficiaary of “VIP” loan rates from Countrywide, author of the bill, close friends with Banking Queen Barney Frank) says the legislation gives regulators a specific blueprint to follow.

“This bill directs the regulators to do things,” he said in an interview. “We leave to the regulators how best to achieve the goals, but the goals are clear. Congress is not __________ (representative of the electorate, for sale except for a lot of money, a regulator, effective).”

In many instances, regulators already have __________ (embarked, been salivating, have thrills running up their legs, been threatening businesses) on rule-writing. The SEC, for instance, has been working on rules that would impose the same professional standards on stockbrokers and dealers that are imposed on financial advisers. The legislation insists that the SEC conduct a (way to tax, way to charge fees, way to punish success, study) first.

Hailing the bill Thursday, Fed Chairman Ben Bernanke said the central bank is also __________ (an unregulated entity, ahead of the game, a threat to our economy, loves Ron Paul), “overhauling its supervision and regulation of banking organizations.”

Regulators also will have to figure out how to implement new standards for how much capital banks should __________ (pay in campaign contributions,  hold in reserve to protect against losses, charge customers to pay for their costs to comply with new regulations, hide their money in offshore bank accounts). The legislation requires rules in 18 months. But the U.S. is also part of international negotiations on what global capital standards should be, and those could move __________ (to restrict American sovereignty, more slowly, to allow the United Nations more control, to subjugate U.S. authority to some global government).

“I am very confident with the _________ (extra constitutional control, unrestricted control, undefined control, strong hand) that this (legislation) gives us, that we will be able to _________ (bring the world with us, redistribute wealth to nations that hate us, make people sorry for criticising me for not paying my taxes, allow me to finally become a dentist).” Geithner told reporters Thursday.

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