senate banking committee

Summers Pulls Name From Consideration for Fed Chief

September 15, 2013 by NewsMaker

After weeks of opposition to his candidacy from an array of progressives, the president’s inability to rally Congressional Democrats on Syria persuaded Mr. Summers that his most important audience — the Senate, which must confirm a Fed chairman — probably could not be won over.

He concluded that the White House was also unlikely to overcome opposition to his candidacy from many of the same Democrats, who view him as an opponent of stronger financial regulation, according to supporters who insisted on anonymity to describe confidential conversations with him.

“Clearly Obama couldn’t bring his own most enthusiastic supporters to back him on an issue of national security,” one supporter said. “How was he going to corral them for Larry?”

Mr. Summers’s decision, which he shared with the president in a phone call Sunday followed by a letter, was described as reluctantly made and reluctantly accepted. Mr. Summers wanted the job and Mr. Obama wanted to pick him. But the public opposition of three Democrats on the Senate banking committee, the first step in the confirmation process, surprised the White House and forced a calculation that this was a battle the administration could not afford to fight.

The embarrassing setback reveals an administration increasingly hamstrung by occasional opposition of liberal Democrats, not just its familiar Republican opponents. It adds to the rocky nature of Mr. Obama’s fifth year, following the failure of a gun-rights bill, the stalling of an immigration overhaul and the lack of progress on a budget deal, on top of the back-and-forth over whether to conduct airstrikes in Syria to punish the Assad regime for a poison gas attack that killed hundreds of civilians.

The withdrawal of Mr. Summers also leaves great uncertainty around the selection of a new Fed chairman, one of the most important economic policy decisions Mr. Obama will make in his second term. The successor to Ben S. Bernanke, the current chair, will shape how much longer and harder the Fed pushes to boost economic growth and reduce unemployment. The next Fed chairman will play a leading role in determining how forcefully the government seeks to constrain the financial industry.

White House officials have described Janet Yellen, the current vice chairwoman, as a finalist, and her candidacy has received widespread attention, but it remains unclear how seriously Mr. Obama is considering her. He does not know her well and White House aides have seemed unenthusiastic about her, despite the substantial support she enjoys from Democrats and outside economists.

If Mr. Obama does not name her — or Timothy F. Geithner, the former Treasury Secretary and Fed official who is well-liked by the president but said to be uninterested in the job — many Fed watchers say they are uncertain where the president will turn.

Mr. Bernanke plans to step down at the end of January, leaving ample time for the Senate to confirm a replacement, but the uncertainty has unsettled financial markets just as the Fed, which is beginning to retreat from its stimulus campaign, tries to assure investors that it will not move too quickly

In a statement released by the White House on Sunday afternoon, Mr. Obama said he had accepted the decision by his friend, whom he praised for helping to rescue the country from the financial crisis that peaked in 2008.

“Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today,” Mr. Obama said in the statement.

He added: “I will always be grateful to Larry for his tireless work and service on behalf of his country, and I look forward to continuing to seek his guidance and counsel in the future.”

The withdrawal ends an unusually public and contentious debate that began when the president declared in a televised interview in June that Mr. Bernanke would depart, opening the replacement process to public scrutiny before a nominee was even named.

Mr. Summers had long been viewed by Mr. Obama and his economic advisers as Mr. Bernanke’s presumptive replacement.

Article source: http://www.nytimes.com/2013/09/16/business/economy/summers-pulls-name-from-consideration-for-fed-chief.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: candidacy, public opposition, senate banking committee

Obama Nominates 2 Senate Aides for S.E.C. Posts

May 23, 2013 by NewsMaker Leave a Comment

President Obama continued his shake-up of the Securities and Exchange Commission on Thursday, naming two Senate aides to senior posts at the Wall Street regulatory agency.

The nominees to the five-member agency are Kara M. Stein, a Democrat, and Michael Piwowar, a Republican. If confirmed by the Senate, they will succeed commissioners whose terms are set to expire.

The move comes just months after Mr. Obama named Mary Jo White, a former federal prosecutor turned Wall Street defense lawyer, to be chairwoman of the agency. In recent weeks, Ms. White has started to overhaul the staff, naming co-heads of the agency’s enforcement unit, new leaders of other major divisions and her own chief of staff. She also hired a general counsel, Anne K. Small, who rejoined the S.E.C. from the White House.

The transition period has coincided with challenges for the agency, which has fallen far behind its rule-making responsibilities. Nearly three years after Congress passed the Dodd-Frank Act, the overhaul of Wall Street regulation, the S.E.C. has carried out only a small fraction of the changes.

The possible arrival of Ms. Stein and Mr. Piwowar could add to some delays as they settle into the agency. Yet the nominees are hardly strangers to the S.E.C.’s business.

Ms. Stein is an aide to Senator Jack Reed, a Rhode Island Democrat who is a senior member of the Senate Banking Committee, which oversees the S.E.C. Mr. Piwowar is the committee’s Republican chief economist.

In a statement late Thursday, the committee chairman, Tim Johnson, expressed support for both nominees. “I look forward to moving both their nominations forward to ensure the commission continues to operate at full strength,” said Mr. Johnson, Democrat of South Dakota.

Article source: http://www.nytimes.com/2013/05/24/business/obama-nominates-2-senate-aides-for-sec-posts.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: former federal prosecutor, senate banking committee, senator jack reed

Fair Game: For Mary Jo White, Few Big-Bank Cases as a Prosecutor

March 9, 2013 by NewsMaker Leave a Comment

Ms. White, who has been nominated to become the chairwoman of the Securities and Exchange Commission, ran the Justice Department’s unit in the Southern District, which includes Manhattan, from 1993 until January 2002. She is expected to appear at a confirmation hearing before the Senate Banking Committee on Tuesday.

Ms. White’s recent work as a partner at Debevoise Plimpton, where she represented JPMorgan Chase, Morgan Stanley and other companies, has come under scrutiny. Her record as a federal prosecutor of financial crime has received less attention.

Given that regulating financial firms will become her purview if she heads the S.E.C., assessing her pursuit of financial fraud as a prosecutor may provide clues to how she would run the agency.

Let’s just say her prosecutorial stint did not include a lot of cases against large United States financial institutions.

Last week, I asked Ms. White which large financial institution cases she was most proud of prosecuting. She declined to be interviewed but, through a colleague, provided a list.

First on that list was a 1996 case against Daiwa Bank, a Japanese institution that lost its license to do business in the United States after Ms. White’s office indicted it for fraud. Daiwa pleaded guilty and paid a fine of $340 million, then a record for a financial institution.

Another case she cited was the 2001 fraud case against Republic Securities, a unit of Republic Bank, which generated $600 million in restitution for clients whose accounts had been valued improperly by bank employees. It, too, pleaded guilty.

A third highlight on Ms. White’s list was a 1999 prosecution of Bankers Trust for misappropriating $19 million from dormant customer accounts. The bank pleaded guilty and paid more than $60 million in fines.

Those are considerable victories. Four other cases she cited through her colleague involved Ponzi schemes and fraud by small investment advisory firms, not household-name Wall Street or financial firms.

A review of her years in the Southern District also turned up several intriguing cases that Ms. White and her colleagues did not pursue or turned away. All three of these matters involved large and prestigious financial companies headquartered in the United States.

A big question mark, federal investigators say, still hangs over the decision by Ms. White’s office not to prosecute Citibank in the mid- to late 1990s for a possible role in questionable money transfers that benefited Raúl Salinas de Gortari, the brother of the former president of Mexico. Between 1992 and 1994, Mr. Salinas, a consultant to a Mexican antipoverty agency whose annual salary never exceeded $190,000, somehow moved almost $100 million from Citibank accounts in Mexico and New York to Citibank accounts in London and Switzerland.

Banks have a legal obligation to prevent money-laundering, and in July 1996, Ms. White’s office opened an investigation into the Salinas transactions. But no prosecution against the bank or any of its officials involved in the Salinas accounts ever came.

A report by the Government Accountability Office in October 1998, as well as a subsequent inquiry by the Senate’s Permanent Subcommittee on Investigations, shed light on what can only be described as disturbing practices at Citibank. Its actions, the report said, helped Mr. Salinas transfer money in a way that “effectively disguised the funds’ source and destination, thus breaking the funds’ paper trail.” Citibank made $2 million in fees on the Salinas accounts, the Senate investigators found.

Mr. Salinas was arrested in February 1995 on suspicion of murdering his former brother-in-law, who had been a leading politician in Mexico. Senate investigators said the bank’s “initial reaction to the arrest was not to assist law enforcement but to determine whether the Salinas accounts should be moved to Switzerland to make discovery of the assets and bank records more difficult.” Mr. Salinas was convicted of the murder in 1999.

As it prepared its report in 1998, three years after Ms. White’s investigation into Citibank began, the G.A.O. requested information from federal prosecutors on the case. The G.A.O. was rebuffed. “Limited by the ongoing Justice Department investigation, we could not determine whether Citibank’s actions violated law or regulation,” the report said.

The case went nowhere. Ms. White declined to comment. But according to her colleague, who spoke to people who worked on the matter, money-laundering cases are tough to prove and must meet a higher standard than conclusions drawn in government reports.

ANOTHER matter that raised questions about Ms. White’s approach during that same period centered on insider trading by friends of Marisa Baridis, a Morgan Stanley compliance employee. In the fall of 1997, a New York State grand jury indicted Ms. Baridis on charges of grand larceny, securities fraud and accepting a bribe. According to the indictment, prosecutors in the Manhattan district attorney’s office, then led by Robert M. Morgenthau, had a tape of Ms. Baridis admitting she leaked confidential information about companies to brokers at other firms who traded on it.

Article source: http://www.nytimes.com/2013/03/10/business/for-mary-jo-white-few-big-bank-cases-as-a-prosecutor.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: debevoise plimpton, financial crime, senate banking committee

DealBook: Doubt Is Cast on Firms Hired to Help Banks

February 1, 2013 by NewsMaker Leave a Comment

Justin Sullivan/Getty ImagesFurniture is removed from a foreclosed house in Richmond, Calif.

Federal authorities are scrutinizing private consultants hired to clean up financial misdeeds like money laundering and foreclosure abuses, taking aim at an industry that is paid billions of dollars by the same banks it is expected to police.

The consultants operate with scant supervision and produce mixed results, according to government documents and interviews with prosecutors and regulators. In one case, the consulting firms enabled the wrongdoing. The deficiencies, officials say, can leave consumers vulnerable and allow tainted money to flow through the financial system.

“How can you be independent if you’re hired by the entity you’re reviewing?” Senator Jack Reed, Democrat of Rhode Island, who sits on the Senate Banking Committee, said.

The pitfalls were exposed last month when federal regulators halted a broad effort to help millions of homeowners in foreclosure. The regulators reached an $8.5 billion settlement with banks, scuttling a flawed foreclosure review run by eight consulting firms. In the end, borrowers hurt by shoddy practices are likely to receive less money than they deserve, regulators said.

On Thursday, Senator Elizabeth Warren, Democrat of Massachusetts, and Representative Elijah Cummings, Democrat of Maryland, announced that they would open an investigation into the foreclosure review, seeking “additional information about the scope of the harms found.”

Critics concede that regulators have little choice but to hire outsiders for certain responsibilities. after they find problems at the banks. The government does not have the resources to ensure that banks follow the rules. Still, consultants like Deloitte Touche and the Promontory Financial Group can add to regulators’ headaches, the government documents and interviews indicate. Some banks that work with consultants continue to run afoul of the law. At other times, consultants underestimate the extent of the misdeeds or facilitate them, preventing regulators from holding institutions accountable.

Now, regulators and lawmakers are rethinking their relationship with the consultants. Officials at the Federal Reserve, which oversees many large banks, are questioning the prudence of relying on consultants so heavily, said two people with direct knowledge of the matter.

When the Office of the Comptroller of the Currency penalized JPMorgan Chase last month for breakdowns in money-laundering controls, it imposed stricter requirements, ordering the bank to hire a consultant with “specialized experience” in money laundering and to ensure that the firm “not be subject to any conflict of interest.” In a separate action against the bank related to a $6 billion trading loss last year, the agency opted not to mandate an outside consultant at all.

While the comptroller’s office will continue requiring consultants in certain cases, some agency officials are worried about the quality of the work, as well as the consultants’ independence, according to three government officials briefed on the matter.

Since the financial crisis, regulators have increasingly relied on consultants. The comptroller’s office ordered banks to hire consultants in more than 130 enforcement actions since 2008, or nearly 15 percent of the cases.

It can be a lucrative business. In 2011, regulators mandated that 14 banks employ consultants to determine whether homeowners were wrongfully evicted. Over 14 months, the consultants collected about $2 billion in fees, according to regulators and bank officials.

Those fees amounted to more than half of what homeowners will receive under the $8.5 billion settlement that ended the review. As part of the deal, officials will disburse $3.3 billion to 3.8 million borrowers in foreclosure.

According to consultants and regulators, the broad review was plagued with inefficiencies. For example, Promontory initially instructed employees to calculate lawyers’ fees for each loan, to assess if borrowers were overcharged. Later, it scrapped the original procedure, only to reverse the policy again two weeks later, according to two reviewers who worked for Promontory.

“From Day 1, Promontory strove to conduct its review work as thoroughly and independently as possible,” a spokesman for the firm, Christopher Winans, said in a statement. “Our overarching concern at all times was to serve the best interests of borrowers.”

Some lawmakers question whether a consultant’s regulatory connections helped it secure contracts. PricewaterhouseCoopers, which has a stable of former Securities and Exchange Commission officials, won much of the foreclosure review work, signing deals with four banks, including Citigroup. Promontory, the firm examining loans for Wells Fargo, Bank of America and PNC, was founded in 2000 by the former head of the comptroller’s office, Eugene A. Ludwig.

When the contracts were initially awarded, some housing advocates complained that consulting firms could not objectively evaluate banks with which they had pre-existing business relationships. The comptroller’s office said it vetted the firms to spot such potential conflicts, and argued that the process provided swifter relief for homeowners than if the government had hired the companies directly through a lengthy contracting process.

But concerns persisted. Deloitte, which won the contract to review JPMorgan’s loans, had previously audited Washington Mutual and Bear Stearns, two firms JPMorgan acquired during the financial crisis. In May, the comptroller’s office replaced Allonhill, the consultant for Aurora Bank, after the firm disclosed that it had already reviewed some “of the same pool of loans” as part of an earlier contract.

“It’s clear from the foreclosure settlement that oversight over consultants was inadequate and the review process was deeply flawed,” said Representative Carolyn B. Maloney, Democrat of New York, who recently pressed regulators to detail how consultants were paid. People close to the review say consultants relied on a process that the comptroller’s office designed in 2011, under previous leadership.

“This was a very complex process,” a spokesman for the comptroller said. “Throughout the process, regulators provided continuous oversight, guidance and were available to discuss issues.” The agency also performs spot checks on the consultants.

Still, the foreclosure review highlighted broader concerns about the role consultants play.

Since the financial crisis, the comptroller’s office has issued nearly 20 enforcement actions against banks that had already hired consultants to help iron out problems, according to government documents. While consultants cannot be expected to remedy every last issue at the banks, the actions raise questions about the effectiveness of their work.

When HSBC, the British bank, was sanctioned in 2003 over porous money-laundering controls, the bank turned to Deloitte to review its compliance, an official briefed on the matter said. Deloitte also worked for HSBC from 2006 to 2008, the person said, building a system to monitor money flows more effectively. But the bank ran into trouble in 2010 over similar issues, as highlighted in a recent scathing report by the Senate’s Permanent Subcommittee on Investigations.

As part of a regulatory order, HSBC again hired Deloitte, this time to assess the number of times the bank failed to report suspicious transactions. Deloitte, three officials said, generously bundled hundreds of missed transfers into a single report. That helped save the bank from some government fines.

Despite the undercounting, HSBC still paid a record $1.9 billion last year to settle accusations that it enabled drug cartels to move money through its American subsidiaries.

In a statement, a spokesman for the firm said, “Deloitte fully stands behind the quality and integrity of its work on behalf of regulatory authorities.”

Deloitte has also been suspected of helping institutions cloak illicit transfers of money to rogue nations around the globe. In August, New York’s top banking regulator, Benjamin M. Lawsky, accused Deloitte of helping the British bank Standard Chartered flout American sanctions.

The consulting firm was hired to flag suspicious transfers routed through Standard Chartered’s New York branches. Instead, it instructed bankers on how to escape regulatory scrutiny, according to state court documents.

Deloitte turned over “highly confidential information” from which the bank gleaned insight into “regulators’ concerns and strategies,” the court documents said. The firm later doctored its report to regulators, Mr. Lawsky said, deliberately removing some illegal transfers on behalf of Iranian clients. In an e-mail, a Deloitte partner admitted that a report on the transactions was a “watered-down version.”

The authorities never took legal action against Deloitte, and federal officials noted in a separate settlement agreement that Standard Chartered employees withheld critical information from the consulting firm.

Despite these concerns, regulators are turning to a familiar source to help Standard Chartered. As part of a $327 million settlement last year, the bank is required to hire “an independent consultant.”

Article source: http://dealbook.nytimes.com/2013/01/31/doubt-is-cast-on-firms-hired-to-help-banks/?partner=rss&emc=rss

Filed Under: Economy News Tagged With: elijah cummings, senate banking committee

DealBook: JPMorgan Regulators in Spotlight After Firm’s Huge Loss

June 6, 2012 by NewsMaker Leave a Comment

Randy L. Rasmussen/The Oregonian, via Associated PressJamie Dimon, chief of JPMorgan Chase.

WASHINGTON — JPMorgan Chase’s regulators will be in the spotlight here on Wednesday, when they testify before Congress on the bank’s multibillion-dollar trading blunder and its implications for the future of Wall Street regulation.

One of the bank’s primary regulators, the Office of the Comptroller of the Currency, will face particular scrutiny for its oversight of the JPMorgan unit responsible for a trading loss of more than $2 billion.

Mixed Reaction to Europe’s Talk of Bolstering a Bailout Fund

September 27, 2011 by NewsMaker Leave a Comment

European officials said a plan was in the works that would enlarge the bailout fund’s borrowing power but not the amount that countries were contributing. The proposal was met guardedly by German officials, who are already struggling to swing public opinion in favor of the more modest aid plan they agreed to in July, let alone any new initiatives.

As finance ministers and central bankers trickled back to Europe from meetings in Washington over the weekend, markets were clearly eager for a plan that would isolate Greece’s problems from the rest of the Continent and ensure that Italy and Spain did not also fall victim to the debt crisis.

The main stock indexes in Europe rose Monday, in part because of expectations that a more robust response to the problem was in the works.

A more potent bailout fund would not remove the need for other changes, like strengthening the banking system and improving decision making by the European Union, said Nicolas Véron, a senior fellow at Bruegel, a research organization in Brussels. But it would help, he said.

“I don’t think one measure can solve it all, but it would make a significant difference in market sentiment,” said Mr. Véron, who testified in Washington last week before the Senate Banking Committee on the debt crisis. Meanwhile, Finland appeared to be closer to resolving an impasse that had threatened to hold up deployment of the existing bailout fund. Alexander Stubb, the Finnish minister for European affairs, said the country’s Parliament was likely to approve a plan agreed to by leaders in July.

Finland is also close to resolving a dispute about its demand for collateral in return for granting more aid to Greece. The dispute illustrated how political opposition in just one of the 17 European Union countries that use the euro can block initiatives.

“I’m very confident we will get the package through Parliament,” Mr. Stubb said by phone. He declined to give details of how the collateral dispute might be resolved.

In Brussels, Amadeu Altafaj-Tardio, a spokesman for the European Commission, confirmed that discussions were under way on methods to extend the effectiveness of the bailout fund, called the European Financial Stability Facility.

Olli Rehn, the commissioner for economic and monetary affairs, had made clear at meetings in Washington that the euro zone was “contemplating further leveraging” of the stability fund, Mr. Altafaj-Tardio said. That option has been urged by United States officials.

Separately, leaders tried to quash rumors that Greece and its creditors had discussed the possibility of banks’ taking a larger cut in the value of their Greek bond holdings — perhaps as much as 50 percent — to reduce the government’s debt burden to a more manageable level.

Such a move remained highly controversial and was opposed by the large banks as well as the European Central Bank, which owns Greek bonds with a value of as much as 60 billion euros, or $80.8 billion. Any Greek default would probably also require a coordinated bailout of banks holding large amounts of Greek debt.

As has often been the case, European leaders seemed to have different perceptions of what was being discussed and how likely it was that the proposals would find support.

Martin Kotthaus, a spokesman for the German Finance Ministry, said in Berlin there was no need to expand the size of the bailout fund by giving it more money than already agreed. There is fear that pumping more money into the fund might threaten the credit rating of countries like France by increasing their liabilities.

But German officials did not appear to be opposed to increasing the rescue fund’s power to leverage its government guarantees. They wanted only to avoid any discussion until Parliament votes this week on a proposal to expand the size of the fund to 780 billion euros. That plan was agreed to by European leaders on July 21. Some analysts have said that the fund needs to be two to three times as big to convince markets that it could handle a wider crisis.

On Monday, a senior official in the Greek Finance Ministry, responding to persistent default rumors, said no such event was imminent. And on Sunday, Evangelos Venizelos, the Greek finance minister, said in Washington that the government’s plan to exchange some existing bonds for new, longer-term securities remained on track.

The debt exchange would impose a relatively modest 21 percent loss on the face value of the affected bonds. It is regarded as a good deal for investors because they would receive more solid paper in exchange. Greek creditors must still indicate their willingness to participate.

Policy makers want to put Greece on a path toward reducing its debt load to just below 100 percent of its gross domestic product within this decade so that it can wean itself off taxpayer bailouts. The hope is that much of that reduction would come through revived economic growth.

But those prospects seem distant given the deep recession into which Greece has fallen and stricter belt-tightening measures being demanded by international creditors.

Jack Ewing reported from Frankfurt and Stephen Castle from Brussels. Liz Alderman contributed reporting from Paris and Landon Thomas Jr. from London.

Article source: http://feeds.nytimes.com/click.phdo?i=6c8e684fe2e542bfe0d0e17c16d6c470

Filed Under: Business News Tagged With: alexander stubb, finance ministers, senate banking committee

Nominee for Consumer Chief Says He Will Streamline Regulations

September 7, 2011 by NewsMaker Leave a Comment

The nominee, Richard Cordray, who is currently the bureau’s head of enforcement, also told the Senate Banking Committee that if confirmed, he would use the agency’s “bigger and more flexible toolbox” to police consumer financial laws and would make judicious use of “needlessly acrimonious” lawsuits to enforce financial regulations.

With those statements and others, Mr. Cordray sought to reassure the committee that he, and the bureau, would be accountable to Congress, despite the significant doubts expressed by Republicans and lobbying groups, including the Chamber of Commerce, that the bureau has too much unfettered power.

But committee Republicans were not buying it. They repeated their assertions, made since the Dodd-Frank financial regulation law establishing the bureau was signed last July, that it and its director would wield unchecked authority over banks and other financial institutions.

“Unless the bureau is reformed,” said Senator Richard Shelby, the Alabama Republican who is the committee’s ranking minority member, “it is only a matter of time before this concentration of power is abused or misused to the detriment of American consumers and the economy.”

Mr. Shelby and 43 other Republican senators have vowed not to allow a vote on a nominee for director unless the Obama administration agrees to changes in the bureau’s structure. In a letter to Mr. Obama in May, the senators called for a board of directors to replace the position of director, for subjecting the bureau to the Congressional appropriations process, and for putting in place guarantees that enforcement of consumer regulations will not interfere with the financial health of banks.

Senator Robert Corker, Republican of Tennessee, assailed committee Democrats for “spewing” what he said were “half truths, mistruths, untruths” about the effort to build the consumer agency. “Almost all of this would go away if the administration would just sit down and put the appropriate checks and balances in place,” including making it easier to override regulations approved by the bureau, Mr. Corker said.

Such regulations can be overturned by a two-thirds vote of the 10-member Financial Stability Oversight Council, which includes the directors of most federal banking and financial regulatory agencies. But Mr. Shelby and other Republicans have argued that that was too high a hurdle and meant that council’s authority rarely be invoked.

Mr. Cordray acknowledged that it was a high hurdle, but one that should not need to be invoked. “We are required by law to communicate and consult with our fellow banking agencies,” he said. “I would hope and expect that concerns that they have about our work and concerns we may have about their work are things we will discuss regularly, that we will work those issues out when we do have disagreements, as I’m sure will occur from time to time, and that it never be necessary to actually invoke some sort of super process to override our rules.”

Senator Charles E. Schumer of New York cited the bureau’s independence as its strength, both in enforcing laws and in streamlining financial disclosures so that consumers could better understand the banking products they were buying. Other banking regulators had ignored their responsibilities in those matters, he said.

Mr. Cordray said some regulation of small banks had been overdone, and he promised to roll back unnecessary rules. As the push for disclosure gained ground in the last 30 years, disclosures became “so long and confusing that they didn’t really help consumers, but they certainly posed burdens on lenders,” Mr. Cordray said. “There’s an opportunity to streamline that and cut that back. That’s something that will be a priority for me if I am director of this bureau.”

Democrats on the panel defended the agency against what they said were Republican efforts to weaken it. The agency “was born out of the failure by prudential regulators to hold financial companies accountable for complying with consumer protection laws,” said Senator Tim Johnson, a South Dakota Democrat who is chairman of the Banking Committee.

Article source: http://feeds.nytimes.com/click.phdo?i=3555120a71c43841639e80c388151bfc

Filed Under: Business News Tagged With: robert corker, senate banking committee, senator richard shelby