Tuesday, March 21, 2017

Dodd-Frank Consolidates More Power in the Hands of Fewer Banks

Subcommittee Examines Chilling Impact of Dodd-Frank on New Financial Institutions March 21,2017
the staff of the Ridgewood blog

WASHINGTON DC, Members of the Financial Services Financial Institutions and Consumer Credit Subcommittee met on Tuesday to examine the chilling impact that the Dodd-Frank Act has had on the creation of new or “de novo” financial institutions.

“Today, we took the first step at looking into why there are so few new banks and the barriers to entry for would-be community financial institutions. The historical data paints a very clear picture of what has happened since the passage of Dodd-Frank. From 2010 to 2016, there were only a handful of new bank and credit union charters granted. In comparison, more than 1,300 new banks and 75 credit unions were chartered between 2000 and 2008.” said Subcommittee Chairman Blaine Luetkemeyer (R-MO). “New financial institutions are a direct benefit to consumers and communities across the nation. The subcommittee will spend the next two years pursuing initiatives that promote financial choice and accessibility for all Americans.”

Key Takeaways from the Hearing:

The number of new, or “de novo,” bank and credit union charters has declined to historic lows since the passage of the Dodd-Frank Act.

Since Dodd-Frank became law, the big banks have gotten bigger while the small banks and credit unions have become fewer.

From 2010 to 2016, there were only five new bank and 16 new credit union charters granted. In comparison, between 2000 and 2008, 1,341 new banks and 75 new credit unions were chartered.

Topline Witness Quotes:

“Lack of de novos has its roots in excessive regulation…Some have argued that bank lending continues and therefore, there has been no impact of Dodd-Frank. Banks continue to lend even with the shackles that bind them. However, in the five years since Dodd-Frank was enacted, the pace of lending was half of what it was several years before the financial crisis. Some banks have stopped offering certain products altogether, such as mortgage and other consumer loans” – Ken Burgess, Chairman, First Capital Bank of Texas

“Unfortunately, new credit unions like The Finest FCU are not being created due not only to the hurdles posed by initial start-up time and costs, but also the daunting over-regulation facing the credit union once its charter is granted. Many smaller credit unions are saying ‘enough is enough’ when it comes to the overregulation of the industry. The compliance requirements in a post-Dodd-Frank environment have grown to a tipping point where it is nearly impossible for many smaller institutions to survive, much less start from scratch. Credit unions want to continue to aid in the economic recovery, but are being stymied by this overregulation. We need regulatory relief – both legislatively and from the regulators.” – Keith Stone, President and CEO of The Finest Federal Credit Union

“[T]hese added costs occasioned by Dodd Frank, Basel III and discretionary supervisory action significantly impaired existing financial institutions’ ability to provide financial services and products to consumers in the communities they serve. Many banks exited the mortgage loan business because of the complexity and uncertainty resulting from Dodd Frank, the CFPB and related rulemaking.” – Patrick Kennedy, Managing Partner, Kennedy Sutherland LLP, on behalf of the Subchapter S Bank Association

Thursday, March 16, 2017

New Jersey Native Nominated to take the Helm of the Commodity Futures Trading Commission

March 16,2017
the staff of the Ridgewood blog

Washington DC, President Donald Trump this week nominated New Jersey native J. Christopher Giancarlo to serve as chairman of the Commodity Futures Trading Commission .The commission regulates the derivatives market, a part of Wall Street that has been criticized for helping spur the financial crisis of 2008.

Giancarlo, who grew up in north Jersey and lives in Haworth in Bergen County, has served as a commissioner on the board since 2014 an acting commissioner since January.

Giancarlo was born in Jersey City, New Jersey. He attended Skidmore College in Saratoga Springs, New York where he graduated Phi Beta Kappa with Government Department Honors. Mr. Giancarlo received his law degree from the Vanderbilt University School of Law where he was an associate research editor at the Vanderbilt Journal of Transnational Law and President of the Law School’s International Law Society. Mr. Giancarlo has been a member of the Bar of the State of New York since 1985

He was nominated by President Obama on August 1, 2013 and confirmed by unanimous consent of the U.S. Senate on June 3, 2014. On June 16, 2014, he was sworn in as a CFTC Commissioner for a term expiring in April 2019. Mr. Giancarlo was designated per seriatim as Acting Chairman of the Commission on January 20, 2017.

Before entering public service, Mr. Giancarlo served as the Executive Vice President of GFI Group Inc., a financial services firm. Prior to joining GFI, Mr. Giancarlo was Executive Vice President and U.S. Legal Counsel of Fenics Software and was a corporate partner in the New York law firm of Brown Raysman Millstein Felder & Steiner. Mr. Giancarlo joined Brown Raysman from Giancarlo & Gleiberman, a law practice founded by Mr. Giancarlo in 1992 following his return from several years in London with the international law firm of Curtis, Mallet-Prevost, Colt & Mosle.

Mr. Giancarlo was also a founding Co-Editor-in-Chief of eSecurities, Trading and Regulation on the Internet (Leader Publications). In addition, Mr. Giancarlo has testified three times before Congress regarding the implementation of the Dodd-Frank Act, and has written and spoken extensively on public policy, legal and other matters involving technology and the financial markets.

Fresh on the heels of being nominated by the White House Tuesday to be Chairman of the US Commodity Futures Trading Commission, J. Christopher Giancarlo spelled out plans to reorganize the agency and “right-size” its regulatory footprint.

“The overly prescriptive regulation of American derivative markets is a part and parcel of the over-regulation of the US economy that thwarts revival of American prosperity,” he said in a speech prepared for delivery at the International Futures Industry conference in Boca Raton, Florida, Wednesday.

To carry out one of President Donald Trump’s executive orders of regulatory reform, Giancarlo announced the launch of an agency-wide review of CFTC regulations and practices “to make them simpler, less burdensome and less costly,” and said the CFTC will seek public comment on that effort.

The regulatory reform initiative, dubbed Project KISS for “Keep It Simple Stupid” will be led by Mike Gill, Giancarlo’s chief of staff, who will serve as the “regulatory reform officer.”

Wednesday, March 08, 2017

Trump Jump Hits US private Sector Creating 298K jobs in February

March 8,2017

the staff of the Ridgewood blog

Ridgewood NJ, the Trump jump continues with companies adding more jobs than expected in February. There was also a notable shift away from the service-sector positions that have dominated hiring for years.

President Trump had tweeted on Monday, “There is an incredible spirit of optimism sweeping the country right now—we’re bringing back the JOBS!”

ADP and Moody’s Analytics reported today that the private sector surged by 298,000 for the month, with goods producers adding 106,000, Construction jobs jumping 66,000 and manufacturing added 32,000.

The 298,000 total shattered market expectations of 190,000, according to economists surveyed by ADP.

Trump tweeted this morning, “LinkedIn Workforce Report: January and February were the strongest consecutive months for hiring since August and September 2015”

Tuesday, March 07, 2017

Arbitrary Nature of Financial Stability Oversight Council and the "Bail Out Nation "

March 6,2017
the staff of the Ridgewood blog

WASHINGTON DC, The House Financial Services Committee released a staff report which reveals that the Financial Stability Oversight Council (FSOC) acts inconsistently and arbitrarily in exercising its power to designate certain non-bank companies as “too big to fail.”

Based on documents requested by the Committee nearly two years ago and the sworn testimony of Treasury Department officials, both of which were only obtained as the result of a Congressional subpoena, the report shows that not only is FSOC’s analysis inconsistent, FSOC does not even follow its own rules—to the extent that FSOC even has rules that could be consistently followed.

“Today’s FSOC designations are tomorrow’s taxpayer-funded bailouts. The FSOC typifies Washington’s shadow regulatory system of powerful government bureaucrats, secretive meetings, arbitrary rules and unchecked power to punish enemies and reward friends,” said House Financial Services Committee Chairman Jeb Hensarling (R-TX). “The Obama Treasury Department tried to keep Congress and the American people in the dark about how FSOC exercises its sweeping powers. The release of this staff report brings some much-needed transparency and oversight to FSOC, and the information contained in the documents clearly demonstrates the need for the accountability reforms Republican have proposed in the Financial CHOICE Act.”

The staff report – which details the non-public analysis associated with FSOC’s processes to designate certain firms as so-called “systemically important financial institutions” and therefore “too big to fail” – comes in the midst of the FSOC’s appeal after a federal district court overturned FSOC’s designation of MetLife and characterized the designation as “arbitrary and capricious.”

In response to previous concerns that its designation process is arbitrary, FSOC has repeatedly stated that its analysis is based on “industry-specific and company-specific factors” without making clear what that meant in practice. But these documents bring to light that FSOC took into account certain factors when designating one company while refusing to consider those identical factors in the designation of another company.

One instance where FSOC did not treat two companies the same was its evaluation of a company’s vulnerability to material financial distress.

For the four nonbank financial companies that the FSOC designated as systemically important financial institutions (SIFIs), the FSOC did not evaluate the vulnerability to material financial distress of those companies. The FSOC has claimed in court both that it is not required to evaluate the probability or likelihood of material financial distress at a nonbank financial company, and that the FSOC’s own guidance does not state it will do so.

The Committee-obtained FSOC documents reveal that the FSOC evaluated the vulnerability of some companies to material financial distress – and then declined to designate those companies. The FSOC made multiple statements about the vulnerability to financial distress of some companies in their confidential evaluations such as “temporary market disruptions would be unlikely to threaten the imminent solvency” of a company, or for another company that its available liquidity resources “make it less likely for liquidity concerns and maturity mismatches to translate into a viable source of systemic risk.”

The FSOC’s documents neither explained this disparate treatment, nor was it explained to the court. This and other instances of disparate treatment of similar factors at different companies calls into question the entirety of FSOC’s analysis and its reliance on “company-specific” qualitative factors as justification for its designations.

These documents also show that the FSOC does not follow its own rules for the nonbank designation process. The FSOC says that it will “assess the impact of the nonbank financial company’s material financial distress in the context of a period of overall stress in the financial services industry and in a weak macroeconomic environment.”

But the documents that are discussed in the staff report detail a number of companies where the conclusions reached by the FSOC were made based on a scenario of the company failing “in isolation,” as opposed to reaching its conclusions in a scenario where there are “developments that cause distress at [the company] and other firms simultaneously.”. These companies were not designated by the FSOC. The reason the FSOC did not follow its own rule was not explained in the documents or the testimony of Treasury officials.

The Financial CHOICE Act – the Republican plan to replace Dodd-Frank and promote economic growth – includes provisions that eliminate FSOC’s authority to designate certain firms as “too big to fail” and rescinds previous FSOC designations. In addition, the CHOICE Act would require the FSOC to operate with a higher degree of transparency and inclusiveness.

Wesley Learns to Invest by Prince Dykes

Wesley Learns to Invest by Prince Dykes MBA (Author), Wesley Dykes (Author)

March 4,2017

the staff of the Ridgewood blog

Ridgewood NJ, For the first time ever a fiction book offers a kid-friendly introduction to the stock market and investing. In “Wesley Learns to Invest”a father teaches his son about the ins and outs of saving and investing.

Young Wesley is about to turn eleven years old, and he really wants a new GS4 gaming system. But money doesn’t grow on trees, so Wesley will have to work hard and save his money to be able to make that purchase. Wesley’s dad helps him out by teaching him the importance of investing and how stocks work.

Wesley Learns to Invest follows Wesley and his dad as they walk through a financial journey—from discovering what the stock market is, to choosing the right stocks, making a purchase, and receiving a dividend check. With his dad’s advice, Wesley is able to set goals and work toward them. Offering a gentle introduction to stocks and long-term goals, Wesley Learns to Invest offers a fun and engaging way for adults to demonstrate to children the value of making smart decisions and spending money in a way that will yield the best benefit rather than simply seeking instant gratification.

The author Prince Dykes, MBA, IAR, SA , is an award-winning author /podcast host/youtuber and International Speaker. Prince hosts the Investor Show (Podcast). After completing my MBA, in 2012 and earning his series 63, series 65, and insurance licenses while serving active duty in the military, Prince dedicated his life to educating children and adults on the power of investing.

With his Investor Show where he interviews investors from all over the world Prince has gained thousands of followers, hundreds in sales/downloads and even was a ABC Shank Tank Finalist. Currently, he is raising money to fund the cartoon based on the book Wesley Learns to Invest which will educate kids and adults on the world of investing.

order today http://www.lulu.com/spotlight/wesleylearnstoinvest

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Friday, February 17, 2017

Federal Reserve Chair Janet Yellen : "no amount of monetary policy stimulus can make up for the fiscal policy headwinds of a cumbersome, failed regulatory state, an uncompetitive tax code"

"Mother Goose " Testifies Before the Financial Services Committee

February 17,2017
one small voice

Wall Street , “Economic growth has been quite disappointing,” Federal Reserve Chair Janet Yellen acknowledged to the Financial Services Committee on Wednesday during her Semi-Annual Monetary Policy Report to Congress, echoing points made by Chairman Jeb Hensarling (R-TX) during his opening statement that Americans have suffered through eight years of subpar growth and stagnant paychecks.

“I believe the last eight years have shown that no amount of monetary policy stimulus can make up for the fiscal policy headwinds of a cumbersome, failed regulatory state, an uncompetitive tax code, Obamacare and Dodd-Frank,” Chairman Hensarling said. “All of these must be remedied and changed if we are to have a healthy economy for all and bank bailouts for none.”

Monetary Policy and Trade Subcommittee Chairman Andy Barr (R-KY) called for a strategy-based monetary policy rather than the Fed’s improvisational approach.

“The American people are ready for a change -- a change from the Fed's unconventional and unpredictable policies, a change from the Fed's inaccurate projections of growth, and a change from disappointing economic results. It's time for the Fed to begin prudently shrinking its balance sheet, end its easy money policies that have fueled government borrowing, and shift to a more firmly grounded strategy-based policy that will assure price stability, facilitate commerce wherever it shows promise, and create the conditions for strong economic growth,” he said.

Monday, February 13, 2017

Hensarling Statement on the Confirmation of Steven Mnuchin

February 13,2017
the staff of the Ridgewood blog

WASHINGTON DC, House Financial Services Committee Chairman Jeb Hensarling (R-TX) issued the following statement on Monday:

“I congratulate Steven Mnuchin on his confirmation to serve as Treasury Secretary, and I look forward to working with him in my capacity as Chairman of the Financial Services Committee to advance policies that will help all Americans raise their standard of living and create a healthy economy.”