PREVIEW-On U.S. financial regulation, it's Warren vs. Dimon

Sun Mar 27, 2011 1:53pm EDT

 * Obama adviser, JPMorgan CEO to speak at chamber event
 * FDIC tees up skin-in-the-game, living-will proposals
 * House Republicans to carry on Dodd-Frank assault
 * U.S. CFTC to advance on commodity speculation curbs
 By Kevin Drawbaugh
 WASHINGTON, March 27 (Reuters) - Elizabeth Warren, the
Obama administration's defender of financial consumers, will
venture into the corporate lion's den this week, along with
Jamie Dimon, CEO of banking giant JPMorgan Chase & Co (JPM.N).
 The two will be speakers at an event set for Wednesday at
the U.S. Chamber of Commerce, the country's largest business
lobbying group, in its Corinthian-columned headquarters
situated within view of the White House.
 Warren, 61, is an earnest Harvard Law School professor
brought up in Oklahoma, while Dimon, 55, is a consummate New
York City insider and one of Wall Street's richest CEOs.
 He was once a close adviser to President Barack Obama on
financial regulation policy, but has become a vocal critic of
the administration's efforts, especially since passage in 2010
of the Dodd-Frank Wall Street reforms.
 She is helping the administration set up the Consumer
Financial Protection Bureau (CFPB), a watchdog called for by
Dodd-Frank to shield consumers from abusive practices in the
mortgage and credit card businesses.
 The remarks by Warren and Dimon will generate headlines,
although analysts said other financial regulation news this
week will have more impact on banks and the markets.
 "The big event next week in Washington is the
long-anticipated release of the rules implementing the
Dodd-Frank risk retention requirement," said Brian Gardner, a
senior policy analyst at investment firm Keefe Bruyette &
Woods.
 Under Dodd-Frank, mortgage lenders that sell loans as
securities -- a practice known as securitization -- must keep
at least 5 percent of the credit risk on their books.
 The measure, requiring lenders to have "skin in the game",
is meant to help restore lending discipline that went out the
window during the securitization-fueled real estate boom at the
root of the 2007-2009 financial crisis.
 The Federal Deposit Insurance Corp will hold a meeting on
Tuesday to consider a risk-retention rule proposal, as well as
a related measure to allow some exemptions.
 LIVING WILLS
 The FDIC will also consider a proposal on living wills for
large banks and financial firms, another Dodd-Frank measure.
Such wills are meant to tell regulators how to shut down an
institution on the brink of collapse in an orderly way,
averting the need for bailouts or bankruptcies.
 Less than three years after taxpayers rescued Wall Street
and the big banks from their worst crisis since the Great
Depression, bank executives, the chamber and many Republicans
in Congress are on the attack against Dodd-Frank.
 Another committee hearing on Wednesday in the House of
Representatives will give Republicans a platform to question
Dodd-Frank and the costs of complying with it. The reforms were
pushed through Congress last year by Democrats over the
opposition of Republicans and bank lobbyists.
 The same lobbyists are now trying to weaken Dodd-Frank at
the agency implementation level, while Republicans seek to cut
the budgets of agencies putting the reforms into practice, and
offer bills to repeal or amend parts of it.
 In another area, House Republicans were expected to advance
plans in a hearing on Thursday to overhaul mortgage titans
Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), although final
action on this is not expected for many more months.
 The Commodity Futures Trading Commission's efforts to
impose regulation for the first time on the $600 trillion swaps
market will come under scrutiny at another hearing on Thursday
before the House Agriculture Committee.
 The CFTC's deadline for accepting comments from the public
on curbing commodity market speculation will arrive on Monday,
along with a flood of industry comments.
 (Additional reporting by Jonathan Stempel in New York, Joe
Rauch in Charlotte, N.C. and Dave Clarke in Washington; Editing
by Dale Hudson)


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Comments (1)
abbydelabbey wrote:
The more I hear Warren speak, the more I admire her intelligence and common sense; one of Obama’s best. She has more integrity than most and more dedication to helping America than many.

Mar 27, 2011 4:01pm EDT  --  Report as abuse
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