Tuesday, July 13, 2010
Knocked Down, Gotta Get Back Up
I am currently dealing with my own personal crisis, which was generated by reading and analyzing the financial reform bill (conference version) over the weekend.
The bottom line is that I am out of work. This is an unmitigated disaster on several levels, and it looks to me like community banks are going to be failing by the thousands. This leaves me in the position of a barrel maker during a certain period of our history.
Aside from the personal consequences, the effect of losing so many community banks will be felt in the real economy. Eventually the destruction will be realized and course will be changed, but not for years. So I have to redo all my forecasts even for investments.
In any case, there will probably be a blogging pause as I reel around trying to cope with my own particular dose of Hope and Change.
I'm guessing small community banks are your clients and without clients you are out of business. But what's in there that wipes out community banks? Is it the reporting requirements? Reserves requirements? Thanks.
The old clients still haven't come back, which puzzles me, but I think the new ones generally have a higher value-add anyway. So I've got that going for me. Which is nice.
Sadly, this bill doesn't really block risky behavior by larger entities.
The part that will put so many community banks under is Title X Bureau of Consumer Financial Protection. This (Elizabeth Warren's baby) takes rulemaking power for the most important laws. This will be fatal because it's going to be a bozo exercise, and they are mixing enforcement for banks and NBFIs. Worse yet, they are expanding regulation to service providers.
This is the list of laws:
(A) the Alternative Mortgage Transaction Parity Act of 1982 (12 U.S.C. 3801 et seq.);
(B) the Consumer Leasing Act of 1976 (15 U.S.C. 1667 et seq.);
(C) the Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.), except with respect to section 920 of that Act;
(D) the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.);
(E) the Fair Credit Billing Act (15 U.S.C. 1666 et seq.);
(F) the Fair Credit Reporting Act (15 U.S.C. 1681 et seq.), except with respect to sections 615(e) and 628 of that Act (15 U.S.C. 1681m(e), 1681w);
(G) the Home Owners Protection Act of 1998 (12 U.S.C. 4901 et seq.);
(H) the Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.);
(I) subsections (b) through (f) of section 43 of the Federal Deposit Insurance Act (12 U.S.C. 1831t(c)-(f));
(J) sections 502 through 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6802-6809) except for section 505 as it applies to section 501(b);
(K) the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2801 et seq.);
(L) the Home Ownership and Equity Protection Act of 1994 (15 U.S.C. 1601 note);
(M) the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.);
(N) the S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.);
(O) the Truth in Lending Act (15 U.S.C. 1601 et seq.);
(P) the Truth in Savings Act (12 U.S.C. 4301 et seq.);
(Q) section 626 of the Omnibus Appropriations Act, 2009 (Public Law 111-8); and
(R) the Interstate Land Sales Full Disclosure Act (15 U.S.C. 1701).
May we all find a place in the new underground economy, and may God have mercy on the souls of those who have caused all this suffering.
Ugh, CPSIA. You have my sympathies as well. The only reason we're doing OK is because the raw materials for my wife's business got a more-or-less blanket exemption from the testing requirements.
Not that some DA with something to prove couldn't still hang us all, if he had a mind to.
The reason that I link to that site so much is that the best gallows humor is always based on truth. Sigh.
I would think your clients need you now more than ever, but I guess its a question of their budgets. I hope its a very temporary situation. They would be lucky to afford you--intelligence and common sense don't often come in the same package, but they do in your case.
My materials got an exemption too, which is the only reason I'm still in business. Unfortunately, my customers didn't get an exemption. They'd love to buy my CPSIA compliant baby booties to stock their boutiques, provided their boutiques are still in business, if they could find people to make the CPSIA compliant clothes and toys that sit next to them on the shelves, and people to buy the clothes and booties at the prices necessary to ensure CPSIA compliance...
Sigh. The people who wrote CPSIA (and I'm sure there's a substantial overlap between them and those who wrote the financial "reform" bill) still insist they listened to all the "stakeholders" because they heard testimony from both Mattel AND Consumer's Union. There's no reasoning with that kind of idiocy, you just have to vote it out. November can't come soon enough, for me or for you, MoM.
I'm sorry you have been so impacted.
I'm, if I may say so, certain that one as intelligent and able as you will be valued even in such a dismal economy as we now endure.
I'd like to convey my empathy and my best wishes.
I look forward to soon hearing positive news.
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