The House approved this week legislation to overhaul financial regulation, but before the vote, Rep. Barney Frank, D-Mass., suggested that he expects the Securities and Exchange Commission would hold brokers to a fiduciary standard. The legislation would give the SEC authority to impose a fiduciary duty on insurance agents as well as broker-dealers. "We gave the SEC the power to do it," Frank said. "And they're going to do it."
Edward J. DeMarco, director of the Federal Housing Finance Agency, offered a number of scenarios for the future of the U.S. housing sector, including one without Fannie Mae and Freddie Mac. DeMarco said another scenario could include Fannie and Freddie, but the mortgage giants would no longer be dependent on the government. However, he warned that infrastructure must be developed that would allow private firms to re-enter the mortgage market.
Legislation to overhaul financial regulation would require clearing of foreign exchange swaps and forwards. "Foreign exchange swaps and foreign exchange forwards shall be considered swaps unless the [Treasury] secretary makes a written determination that either foreign exchange swaps or foreign exchange forwards or both should be not be regulated as swaps under this Act," the legislation states.
Consumers in New York state will no longer be charged extra fees for debit card use and domestic workers will be granted temporary disability benefits, unemployment insurance, time off and overtime, under a set of new bills passed by the state legislature and awaiting signature by Gov. David Paterson.
Industry groups are raising concerns about a plan by the Federal Deposit Insurance Corp. to revamp part of the asset-backed securities market. The groups say the plan could hinder credit and the economic recovery. The FDIC's proposal would require financial institutions that sell securitized loans to retain 5% of the credit risk in order to receive protection that increases the attractiveness of the bonds.