Obama might expand act he criticized during campaign

06/30/2009 | AmericanBanker.com (subscription required)

President Barack Obama's proposal for regulatory reform would expand a portion of the Gramm-Leach-Bliley Act of 1999 that gave the Federal Reserve "umbrella supervisory" powers. It is the same act Obama criticized during his campaign as being the cause of the financial crisis. The change would remove barriers that restrict the Fed's power to investigate practices at units of big financial firms. Ken Bentsen, a former Democratic congressman from Texas who is now president of ELFA, voted for the bill in 1999 and continues to support it. "I don't think it was the wrong vote at all," he said. "I'm not going to fall on my sword to defend Gramm-Leach-Bliley. Are there things that didn't work? Sure, but that happens with everything."

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