Who's Afraid of Reforming Wall Street?

Article analysis: Reality Check: Who's Afraid of Reforming Wall Street? By Joe, K.

The article discusses the legislative challenges that Dodd-Frank financial reform bill faces in senate and the underlying vested interests fueling its opposition, which are disguised as genuine proposals to reduce government expenditure. The article urges that those seeking to reduce funding for Security Exchange Commission (SEC), Commodity Features Trading Commission (CFTC) and opposing the establishment of Consumer Financial Protection Bureau (CFPB) are protecting the interests of financial institutions at the expense of people's welfare. Reducing the above mentioned institution funding is tantamount to removing the citizens' legislative defense against organized financial scams like the ones witnessed in America recently. The financial empowerment of this institution will enhance their effectiveness in preventing financial fraud and indiscriminate prosecution of culprits. The article portrays the Republicans as interested in serving the interests of investors at the tax payers' expense. The author urges that citizens will attain excellent legislative protection from financial fraud and exploitive tendencies by financial institutions through the enactment of the Dodd-Frank financial reform bill. It aims at empowering organizations charged with the responsibility of regulating financial markets to protect the country from a repeat of the current mortgage and credit card related financial crisis. Some of the players in the financial fraud such as rating agencies were not held accountable for their role in the scam. This was attributable to the lack of the financial oversight authorities to investigate and prosecute fraud scams due to lack of finance to fund their operations.

The article points at the failure of SEC and CFTC to prevent the housing mortgage related credit crisis. The failure to prevent then current financial crisis whose genesis is the fraudulent mortgage credit trading. The article also points out that the opposition of the Dodd-Frank financial reform bill by the Republicans is a calculated move aimed at undermining financial regulation authorities' capacity to effectively undertake their legal mandate. This is disguised as advocacy aimed at reducing government spending. This opposition is aimed at protecting financial institution from scrutiny by federal authority. This sets a favorable legislative environment that encourages institutionalized fraud and protects individuals and company involved organized financial scams. The bill should be passed to protect citizen from unscrupulous financial traders, thus enhancing their financial security by preventing exploitive mortgage and credit card deals.

The article assigns the genesis of the financial crisis to the sale of mortgage to people who could not afford it. The aim of selling the mortgage was generating bond packages, which were offered as investment packages. The investments were then transformed into market derivatives that were sold to traders and investors in bonds. When the mortgages were defaulted, only the financial traders benefited while the government and homeowners endured the losses. The tax payers' money was used to rescue the banks while the home owners had to bear the loss of shelter in addition to repayment of unreasonably highly rated interests on mortgages. A significant number of Americans were affected by the credit crisis which led to lose of homes and jobs as result of ripple effects of instability