I’d like to see this really drawn out but at least in writing, it sounds good, but on the practical basis, I would like to do that and keep those special purpose entities and special purpose vehicles not going beyond the 3%.
The Office of Press Supervision, which has been around as long as I think I’ve been in the financial services, is being abolished and those offices are being moved over to the comptroller of the currency. Banks have now the same guidelines as the holding company, which is a big change for all of us.
Insurance is interesting as well. We have a federal insurance office and is now going to be part of the Treasury Department and it’s going to monitor systemic risk, not only in the US, but on a global basis. So they’re going to be looking at if there is an AIG in England or an AIG in Russia. They are going to know about it and how it might affect our insurance business.
The final element is that it’s going to attempt — there is a lot of great insurance commissions in the United States and I think the initiative to beef up the coordination between the federal and state projects is a real important element of Dodd-Frank.
Consumer Safety and Advocacy. This is probably one of the things that a lot of investors are interested in. Banks are no longer prohibited from paying interests on business demand deposits. There is going to be oversight of the credit card interchange fees for small businesses. This is an interesting one and I’ve gotten comments on is that consumers will have free access to any credit card information that impacts their employment opportunities. If they apply for a job and because they have a bad credit report, that is the only thing holding them back from their job to get free access to that information to see if those corrections can be made.
Part Two. As I mentioned earlier, this is one of the things that many of us are interested in and see how this develops. SEC has the responsibility to determine if brokers or financial advisers should be deemed fiduciaries. That’s that way it is in Canada. So we will see what’s going to happen with the SEC in that situation. Currently as you know, it is really fiduciary status is limited to trusted partners to treasury accounts and registered investment advisors. For those of you who are not familiar with the difference between our system and where we deem an advisor to be a fiduciary, it really does put the client’s interest first, instead of being a reasonable recommendation or a reasonable service. I would like to give you an example of that, on how that might work. Reasonable and suitable versus the possibility of someone’s best interest in a fiduciary capacity. I use the analogy of someone who wants to buy a coat. Under our current system, it is reasonable and suitable if someone wants to buy a coat; you represented them properly to sell them the coat. You have no other requirements beyond that, but in the best interest, much like in the fiduciary capacity, you can say, “Yes, you like the coat. It fits you. It’s just like you described it but since you have 200, I’m not going to sell you anymore.” That’s the difference. That’s not where we are but that’s where some other countries are in terms of financial service.
Consumer Safety Net and Advocacy Part III
I’ve been a fan of General Accountability Office which used to be called the General Accounting Office for a long time. They do a good job and many of you may be familiar with the study they did several years ago in terms of the recoverability of awards to arbitration. The GAO is not going to do regular audit for the SEC. I think that’s a terrific part of Dodd-Frank.
There is going to be an Investment Advisory Committee consisting of a group of investors and I can’t imagine being able to keep that group quiet when they get around the talk of the SEC about their recommendation. That’s going to be an interesting meeting.
Finally, there is going to be an Office of the Investor Advocate in the SEC, to aid investors who had problems dealing with SEC. I think that many of you read David Cox’s scathing criticism of the SEC when he did the Madoff audit. It was unmercifully candid and direct and I think that’s institutionalized in the SEC now.
Here are some additional safety nets. Let’s look at those very quickly because we are about to run out of time.
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