Is Passage of Banking Reform a Slam Dunk?
June 28, 2010
It's been a long time coming.
Following exhaustive debate, proposed banking legislation has been finalized and is expected to be put to a vote this week.
Coverage of the outcome of the conference committee process, which is the legislative procedure for reconciling differences between House and Senate versions of the same bill, has focused on the details of the final proposal, as if passage of the bill is merely a technicality at this point. That could be setting people up for a surprise.
Certainly, it is probable that the banking bill will pass, but it is not a slam dunk. Why? Because the conference committee went well beyond simple reconciliation in finalizing the bill. Given the partisan differences and special interests surrounding this legislation, the final vote could be more contentious than most people seem to anticipate.
In the end, what will probably tip the balance toward passage is the fact that with mid-term elections looming, there are many lawmakers who simply want to say they voted for banking reform -- no matter what the substance of that reform actually is.
Assuming the bill does pass, should you expect to see dramatic changes in your banking fees, or in your savings account rates? Will money market rates or CD rates change materially?
Don't expect an immediate, dramatic impact. Indeed, recent legislation on credit cards and overdraft fees produced much more tangible changes for the consumer than this new reform bill is likely to. MoneyRates.com will publish more detail on the expected outcome of this bill if and when it passes, but keep in mind that a central intention of the new law is to make the financial system more stable. If it succeeds, the outcome will be more a matter of what you don't see happening than what you do.
