Olens takes on another federal overreach: Dodd-Frank
In Washington, Congress passes and the president signs a vast expansion of federal power over a large and critical industry.
In corporate boardrooms, business executives believe that law usurps their rights. In state capitals, attorneys general believe it infringes on states’ sovereignty and puts them at great financial risk. The two groups come together and sue to overturn the law.
A recap of the Obamacare lawsuit decided by the U.S. Supreme Court last summer? Yes, but it’s also the lead-up to another legal battle stemming from Democrats’ dominance of Washington in 2009 and 2010.
Last month, Georgia joined a lawsuit seeking to overturn major portions of the Dodd-Frank financial reform law of 2010. The law’s stated intent was to avoid failures of “too big to fail” banks and subsequent market panics, of the kind we saw in autumn 2008.
There are good arguments that the law’s authors got the policy wrong, and enshrined “too big to fail” in federal law rather than preventing it. But this lawsuit is not about policy preferences, state Attorney General Sam Olens said in a recent interview.
“We do not disagree that the consumer needs to be protected,” he said. “We feel the laws and regulations must be consistent with the Constitution.”
Among other things, the suit contends the law robs financial firms — including, critically, ones in which Georgia’s pension funds have investments — of due process and allows federal regulators to “treat similarly situated creditors differently” as part of its Orderly Liquidation Authority.
The problem would begin, Olens said, when federal regulators decide a financial firm is in danger of failing and should be liquidated:
“Upon which [regulators] give notice to the institution and you have 24 hours to have a federal judge issue a ruling. If the judge does not issue a ruling within 24 hours, [their] action is affirmed.
“The ruling and the proceeding are closed to the public. The filings are closed to the public. And you are limited to an ‘arbitrary and capricious’ standard to thereafter appeal the decision, which is also closed to the public.”
Worse, Olens continued, even a successful appeal could be too late, because the law blocks courts from delaying the firm’s liquidation. “So it violates numerous separation of powers issues in our Constitution,” he said.
As a firm was liquidated, the law could result in Georgia and other creditors losing their priority over others — as when Chrysler made some bondholders, including Indiana’s pension fund, secondary to labor-union pension funds and other unsecured creditors during its 2009 bankruptcy proceeding. That, Olens said, would violate Georgia’s property rights.
If it seems like Olens and other state attorneys general are more active in opposing federal actions than their predecessors did, from EPA rules to presidential recess appointments, “that’s because you’re seeing a lot more out of Washington, D.C., than you ever have before,” said Alan Wilson, attorney general for South Carolina, which is also a party to the Dodd-Frank lawsuit. (The other nine state plaintiffs include Alabama, Michigan, Ohio and Texas; there are also three private-sector plaintiffs.)
“I do believe it’s our role to challenge [the federal government] when it does overstep,” Wilson argued during a joint press conference with Olens last week, “and that’s what we’ll continue to do.”
– By Kyle Wingfield
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298 comments Add your comment
Lil' Barry Bailout - OBAMAPHONE!!!
March 4th, 2013
11:02 am
cj: at some point we need to get this country back on track.
———-
And what would be your first legislative proposal to do that?
Truth teller
March 4th, 2013
11:04 am
Independent thinker,
A lot of those Georgia banks that went under were the small community lender banks that popped up and took in money in many cases to lend to “disadvantaged” communitites. Sort of like the community banks like Maxine Waters husband’s bank that got in trouble. You really should learn what you are talking about before making yourself look so foolish.
Retired Soldier
March 4th, 2013
11:18 am
Truth-
In and around where I live the community banks failed because they went overboard with real estate loans during the real estate bubble. When the bubble burst they were over exposed. The community bank that went under where I live had been open for over 100 years. The solution was simple, during these extraordindary times keep those troubled banks under a close watch by the FDIC and suspend the normal rules for closing a bank to give them additional time to “get right” on their balance sheet. Our congressman was asked to help and he turned his back on the citizens of his district.
Who was the loser? Many regular folks that owned bank shares of their community bank. BTW I have been told it is the stated policy of the FDIC is to close as many community banks as possible. Why you ask? It will reduce their workload. Thanks Congressman, thanks FDIC.
Don't Tread
March 4th, 2013
11:21 am
Sam got it right when he said “We feel the laws and regulations must be consistent with the Constitution.”. Politicians (mostly Democrats, but sometimes Republicans get their hand in it too) always cover up expansion of federal power and trampling the rights of citizens with these “stated intent” lies. Let’s review a few:
Dodd-Frank – see above
Campaign finance law: stated intent was to reduce the influence of money in campaigns, actual outcome was to violate the free-speech rights of the people during an election.
New gun-control laws: stated intent is to “make the people safer” and prevent mass shootings like in CT, actual intent is to violate 2nd Amendment rights. (Some people still don’t know/don’t care what “shall not be infringed” means.)
NDAA: stated intent is to “help defend the country” against terrorists, actual outcome is to remove due process as the President can order the military to kill American citizens on US soil, after declaring them a “terrorist”. (This follows the government performing unconstitutional surveillance and wiretapping of citizens without a warrant.)
Concentrated power is the enemy of liberty.
Aquagirl
March 4th, 2013
11:29 am
BTW I have been told it is the stated policy of the FDIC
I have been told RS is prone to say crap while hiding behind the passive “I have been told.”
MarkV
March 4th, 2013
11:42 am
With all due respect (meaning very little) for the competence of people like Kyle and most of those on the blog to make a judgment regarding a complex law like Dodd-Frank, the article is mostly an incentive for the usual grandiose, pseudo-expert opinions and rehashing of the mortgage crisis, which inevitably would lead to bickering about the function of the government and then other extraneous issues. What is even more to the point is that the lawsuit Kyle refers to is not, ostensibly, about the appropriateness of the law provisions with respect to what they are trying to achieve, but about the law’s constitutionality. Which is an issue about which I believe the aforementioned people are even less competent to make a judgment.
Under ideal conditions, I would gladly defer to the Supreme Court, as instructed by the Constitution, in any case where the constitutionality issues are raised. However, in view of recent statements of some Supreme Court justices, such as Scalia in case of the voting rights act – it becomes questionable whether even the Supreme Court is capable of making a well-reasoned decision.
Don't Tread
March 4th, 2013
11:57 am
“I believe the aforementioned people are even less competent to make a judgment”
“it becomes questionable whether even the Supreme Court is capable of making a well-reasoned decision”
So I suppose the only one competent enough to make an unquestionable judgement about the Constitutionality of anything is you, MarkV? Well that settles it. Seeing as you are the sole possessor of knowledge on the subject, let’s just make you dictator then.
Tiberius - pulling the tail of the left AND right when needed
March 4th, 2013
12:02 pm
The last thing you do, Don’t Tread, is make a liar and a coward a dictator.
getalife
March 4th, 2013
12:10 pm
Good luck with that cons.
Hillbilly D
March 4th, 2013
12:10 pm
The law’s stated intent was to avoid failures of “too big to fail” banks and subsequent market panics, of the kind we saw in autumn 2008.
If they really wanted to put an end to “too big to fail”, they’d bust ‘em up, so none would be “too big to fail”. Wall Street owns both parties, though, so they ain’t going to happen. Anything else is just putting a hog in a fancy prom dress.
MarkV
March 4th, 2013
12:12 pm
Don’t Tread @ 11:57 am
“So I suppose the only one competent enough to make an unquestionable judgement about the Constitutionality of anything is you, MarkV?”
One can count on Don’t Tread to make a stupid comment. Would you care to show where I indicated that I would be competent to make such a judgment?
Hillbilly D
March 4th, 2013
12:12 pm
A lot of those Georgia banks that went under were the small community lender banks that popped up and took in money in many cases to lend to “disadvantaged” communitites.
The ones that popped up in my community took in money to loan to their developer buddies and family members to build McMansions.
Lil' Barry Bailout - OBAMAPHONE!!!
March 4th, 2013
12:19 pm
“in view of recent statements of some Supreme Court justices, such as Scalia in case of the voting rights act – it becomes questionable”
———-
Someone doesn’t know what he’s talking about. Either that or he’s happy to repeat a lie.
MarkV: Ignorant? Or liar?
clem
March 4th, 2013
12:31 pm
my guess is lil barry couldn’t carry markv’s jockstrap…scalia like woodward is losing his marbles
fair and balanced
March 4th, 2013
12:35 pm
“”"”"”"”It is natural, for any who are opposed to big government to be opposed to the big banks. These conservative critics argue that the big banks are, essentially, big government cronies. “Big business needs big government,” is a phrase often heard in some conservative and libertarian circles. Indeed, the reason the banks got so big in the first place, is crony capitalism.
There are different ideas about how to encourage the big banks to dissolve themselves into smaller parts. Johnson advocates higher capital requirements. Pethokoukis suggests that traditional banking activities and the more complicated brokerage activities not be allowed to exist in the same company.
Whether the Republican Party will adopt this platform is yet to be seen. There are signs that Rep. Jeb Hensarling (R-Texas), the new chair of the House Financial Services Committee, supports the idea of breaking up the biggest banks. He could find common cause with some liberal Democrats as well, such as newly-elected Sen. Elizabeth Warren (D-Mass.).
One of the challenges, though, of getting congressional Republicans to go along with this agenda, Johnson and Pethokoukis both point out, is that many Republicans receive campaign donations from those large banks (yet another example of how crony capitalism works)
Read more at http://www.christianpost.com/news/will-republicans-support-breaking-up-big-banks-88473/#bwADUMEejFbR8BXl.99
But of course Kyle and the resident wingnuts here want less government control. How blissful and ignorant folks are in this bastion of the South.
Lil' Barry Bailout - OBAMAPHONE!!!
March 4th, 2013
12:45 pm
clem, do you think Justice Scalia said that minorities shouldn’t be able to vote? Just curious, since that’s what the idiotarians are claiming he said.
Tiberius - pulling the tail of the left AND right when needed
March 4th, 2013
12:52 pm
The problem was the banks weren’t allowed to fail in the first place.
No one learns a lesson nor changes their ways if they’re constantly bailed out of their own misdeeds.
Finn McCool (The System isn't Broken; It's Fixed)
March 4th, 2013
1:01 pm
Yeah, let’s not be too harsh on these bankers:
The banks had long maintained that, although they had relied on faulty documents to push through foreclosures, they rarely forced people out of their homes by mistake. The discovery that over 700 active duty military members — protected by federal law — nonetheless faced foreclosure serves as star riposte to such claims.
nytimes.com
independent thinker
March 4th, 2013
1:01 pm
How the cons ruined the banking industry in Georgia by undoing consumer protection laws which now Dodd Frank has to be forced down the cons throat for being so irresponsible and ignorant (a very common trait of the stupid party in Georgia):
“”So what’s the matter with Georgia? As I said, banks went wild, in a scene strongly reminiscent of the savings-and-loan excesses of the 1980s. High-flying bank executives aggressively expanded lending — and paid themselves lavishly — while relying heavily on “hot money” raised from outside investors rather than on their own depositors.
It was fun while it lasted. Then the music stopped.
Why didn’t the same thing happen in Texas? The most likely answer, surprisingly, is that Texas had strong consumer-protection regulation. In particular, Texas law made it difficult for homeowners to treat their homes as piggybanks, extracting cash by increasing the size of their mortgages. Georgia lacked any similar protections (and the Bush administration blocked the state’s efforts to restrict subprime lending directly). And Georgia suffered from the difference.
What’s striking about the contrast between the Texas story and Georgia’s debacle is that it doesn’t seem to have anything to do with the issues that have dominated debates about banking reform. For example, many observers have blamed complex financial derivatives for the crisis. But Georgia banks blew themselves up with old-fashioned loans gone bad.”"”"”"”"”"”"”"”"
from Paul Krugman in the NY Times 2012 about why Georgia banks failed and Texas banks did not with similar banking conditions. One more gift to Georgia from ole W.
Half Century Dawg
March 4th, 2013
1:02 pm
stop all bailouts, if you mismanage your business then you deserve to fail.
Tiberius - pulling the tail of the left AND right when needed
March 4th, 2013
1:04 pm
How many of you libs on here supported TARP?
Finn McCool (The System isn't Broken; It's Fixed)
March 4th, 2013
1:07 pm
A lot of those Georgia banks that went under were the small community lender banks that popped up and took in money in many cases to lend to “disadvantaged” communitites.
Got any proof?
Finn McCool (The System isn't Broken; It's Fixed)
March 4th, 2013
1:11 pm
In 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. The FDIC has said 2010 likely was the high-water mark for bank failures from the Great Recession. By this time last year, 51 banks had failed. From 2008 through 2011, bank failures cost the fund an estimated $88 billion. The deposit insurance fund fell into the red in 2009. But with failures slowing, the fund’s balance turned positive in the second quarter of last year. By Dec. 31, it stood at $11.8 billion, according to the FDIC. The FDIC expects failures from 2012 through 2016 to cost $12 billion.
just $88 billion in FDIC funds…..
Finn McCool (The System isn't Broken; It's Fixed)
March 4th, 2013
1:13 pm
It was fun while it lasted. Then the music stopped.
And the citizens are out a lot of money….and no one goes to jail.
Aquagirl
March 4th, 2013
1:22 pm
No one learns a lesson nor changes their ways if they’re constantly bailed out of their own misdeeds.
Why, look how Countrywide learned its lesson and is now serving fries at McDonalds while hoping for a promotion to shift manager. What a heartwarming story of redemption.
Corporations are people, my friend.
bluecoat
March 4th, 2013
1:23 pm
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AJC ObituariesFamily-placed noticesShoppingHome > News > Crime & Law
Updated: 12:02 p.m. Monday, March 4, 2013 | Posted: 11:09 a.m. Monday, March 4, 2013
Former Gilmer bank vice president indicted on fraud charges
bluecoat
March 4th, 2013
1:26 pm
whew did not mean to paste all that.just the bank part.
Tiberius - pulling the tail of the left AND right when needed
March 4th, 2013
1:39 pm
Aquagirl continues to prove she’s an idiot.
Most people know that if a bank (or any company) goes under, the people responsible for that failure no longer have a means of income.
And many will likely be blackballed by their industry if they ever come sniffing around for another executive position, if they haven’t been indicted and convicted first.
But that’s in the world of free markets and responsibility.
Just another something about which Aquagirl remains ignorant.
Aquagirl
March 4th, 2013
1:49 pm
Most people know that if a bank (or any company) goes under, the people responsible for that failure no longer have a means of income.
I’m sure Angelo Mozilo is really suffering through his unemployment.
Buzzy
March 4th, 2013
2:00 pm
I tell you what the federal overreach was Kyle, it was when the federal government bailed out the Wall Street crooks to the total tune of trillions of dollars, and of course they did it in our name since we will ultimately pay for it.
If anything, Dodd Frank should have been even more strict that it was. Keep in mind, these big bankers claim that they live by the free market: win or lose. But they never lose , because they have the lobbyists to make sure they don’t really live by the free market.
No way that Wall Streets gets out of this thing scott free. They should be regulated to the hilt and we need the enforcement to back it up.
DebbieDoRight - A Do Right Woman
March 4th, 2013
2:02 pm
Aqualgirl, DIA, Aynie — you guys are my heroes!
Keep up the good work!
Aesop's Fables and other Lib Economic Theories
March 4th, 2013
2:04 pm
The world famous “I’m a lib so I know more than the experts do” syndrome has manifested itself quite deeply today.
Tiberius - pulling the tail of the left AND right when needed
March 4th, 2013
2:09 pm
Aquagirl, once again, you may not cherry-pick a statement by me and use it to make your case when the totality of my statement makes mine.
Try reading the next part of my post and get back to me with your apology.
Aesop's Fables and other Lib Economic Theories
March 4th, 2013
2:10 pm
Giant gleaming pearls of dummycrat wisdom, “these banks are making a profit so we need to do something about it,” followed by “we know best” and concluded with “let’s tax them.”
We no longer have to wonder why they can only acheive 0.1% growth.
Retired Soldier
March 4th, 2013
2:11 pm
I never thought AQ would be the defender of the big mega banks. I guess it stands to reason though, liberals support Obama, Obama supports who ever will donate big bucks. Hence Liberals and Obama are the protectors of Wall Street that pays the big bucks to play.. Good job AQ. Good job liberals. Good job Obama.
Cheesy Grits
March 4th, 2013
2:23 pm
Good job liberals. Good job Obama.
Your welcome
Cheesy Grits
March 4th, 2013
2:25 pm
And many will likely be blackballed by their industry if they ever come sniffing around for another executive position, if they haven’t been indicted and convicted first.
But that’s in the world of free markets and responsibility.
Just another something about which Aquagirl remains ignorant.
Your naivety is astounding.
Lil' Barry Bailout - OBAMAPHONE!!!
March 4th, 2013
2:25 pm
Finn McCool: And the citizens are out a lot of money….and no one goes to jail.
——–
Not even Franklin Raines?
DebbieDoRight - A Do Right Woman
March 4th, 2013
2:31 pm
But of course Kyle and the resident wingnuts here want less government control. How blissful and ignorant folks are in this bastion of the South.
Third World Status Here we come………….
Aquagirl
March 4th, 2013
2:32 pm
Try reading the next part of my post and get back to me with your apology
I’m very sorry I made you look so incredibly dumb. In the future I will try and stop you before you stick your foot in your mouth and claim executives of failed financial institutions have really, really, learned a very special important lesson.
Feel better?
Lil' Barry Bailout - OBAMAPHONE!!!
March 4th, 2013
2:38 pm
Who’s been in charge of prosecuting these fraudsters the last four years, and why have they failed so pathetically?
Oh, right. Campaign contributions.
DebbieDoRight - A Do Right Woman
March 4th, 2013
2:38 pm
I never thought AQ would be the defender of the big mega banks. I guess it stands to reason though, liberals support Obama, Obama supports who ever will donate big bucks
I thought Sam Olens was a Republican……….
Tiberius - pulling the tail of the left AND right when needed
March 4th, 2013
2:40 pm
Aquagirl, is English your primary language? I suspect not, given your inability to comprehend my original statement that executives have NOT been made to learn a lesson.
You look even more dumb each and every time you post.
But you’re a lib, so that’s nothing special.
Lil' Barry Bailout - OBAMAPHONE!!!
March 4th, 2013
2:44 pm
Remember during the 2008 campaign how the Democrats were crowing about the big advantage they had in fundraising from Wall Street? They sure got quiet about that. Maybe that explains the dearth of prosecution in the last four years.
Democrats: Unindicted co-conspirators.
Retired Soldier
March 4th, 2013
2:47 pm
Exactly, a nest of the like minded Obama and Wall Street.
Finn McCool (The System isn't Broken; It's Fixed)
March 4th, 2013
2:52 pm
CDC: Georgia is No. 4 in syphilis cases
Come on, Georgians, we can win this!!
Aesop's Fables and other Lib Economic Theories
March 4th, 2013
2:55 pm
Yeah, Conservative Values cause increases in syphillis, uh- huh.
DebbieDoRight - A Do Right Woman
March 4th, 2013
2:56 pm
Remember during the 2008 campaign how the Democrats were crowing about the big advantage they had in fundraising from Wall Street?
No. Got proof?
Finn McCool (The System isn't Broken; It's Fixed)
March 4th, 2013
2:57 pm
Conservative Values cause increases in syphillis
Hide your farm animals.
Cheesy Grits is gone but not forgotten
March 4th, 2013
3:00 pm
Testing
1 , 2,
Is that you John Wayne, Is this me.