Then there is going to be under HUD of office health and counseling. I think that you’ll see throughout this, a lot of measures that are trying to keep people in their homes, both writing checks, passes for counseling and other omnibus ombudsman sort of figures within these organizations to help people keep their homes.
Certainly, when you are working with hedge funds, there are going to be some new rules. There have been, as I have called it here, the paradox of oversight because sometimes they were similarly regulated, sometimes they were looked at the SEC but sometimes there was a grey area and really nobody looked at them. Now, they’re going to have to report to the SEC. An interesting element is that you work with interstate agencies, I think the State Securities and Insurance Commissions, they’re known by different monikers in every state, but all of the sudden, hedge funds now are – anything under $100 million, before it’s $30 million, are going to be regulated by the state. Those apartments are really going to ramp up, especially in the Northeast, if you’re in the New York, New Jersey, Connecticut area, where there are a lot of smaller hedge funds. They’re going to be under state regulation under $100 million.
There’s issues related to minority and women inclusion. These have been overlooked, but I think these are important measures. I think very classy measures related to Dodd-Frank. You are going to have an office with the minority and women inclusion; it is going to target employment and contracting opportunities for these target audience. There is going to be technical assistance and probably financial assistance, as well.
Too big the sale.
They are trying to eliminate this term from the vocabulary of Washington. I’m not sure we reached that point yet, but here’s their attempt to do it. There are several elements to these and some will call this Part 1. The options for liquidation of financial institutions have to be prepared in advance. It’s like writing your own funeral. You have to write your own liquidation the way that the company should be sliced and diced in the event that it fails.
The new capital leverage reserve requirements are saying that they are not going to get less. They are going to be where they are or even higher. The commentators have said that this eliminates the possibility of another 2008 TARP-like bailout. I don’t believe that’s true. I think that it lessens the likelihood of it, but there is nothing to keep the government from stepping in and doing another 2008 TARP bailout. It discourages it but I don’t think it eliminates it; not from my reading of it. The financial firms are going to be required to make the deposit into this fund for bailouts or for near bailouts so the federal government is not going to have to do it. I think they are targeting $50 billion from the financial institutions to begin with. So it is a significant amount of money.
Look at this again. The Paul Volcker rule certainly had a lot of sway in designing some of the elements of Dodd-Frank. He wants to keep, sort of, the brain bank and some elements of the old last eagle where we isolate the high risk trading investment sponsorship away from the commercial side of the bank. The FDIC limits are not going to be expanded under the Dodd-Frank. That have been lobbied for because of the lack of coverage for some of the Madoff and Stanford victims, but the FDIC coverage is not going to be expanded and then again, you have to write your own funeral plan.
Here’s what Wall Street has thought about the new legislation. I like to follow some of the industry that kind of speaks in terms of what the market feels about it. This is an index in Exchange Traded Funds that based upon bank stocks. The KBE and you can see the performance over the last several months, the red arrow indicates when the Bill was signed and the bank index actually gone up in value. I checked this morning; it is still right around 24. So Wall Street investors and professional investors don’t believe that this is going to be a crippling blow to financial services.
Here is the oversight council. Here is one thing that I haven’t seen much press on. I think it is an interesting element and I think we are going to probably hear some strong voices come out of this. This new oversight council is going to have ten financial regulators. On is going to be an independent member and five non-voting. It is going to be chaired by the Treasury secretary.
The Dodd-Frank Wall Street Reform & Consumer Protection Act: The Impact on Regulatory Mandates & Securities Litigation Pt. 6 is presented by The TASA Group, consumer protection expert witness referral specialists.