Benefits, Questions in Financial Reform, Financial Services Group Chief Says

A massive financial reform measure creates new challenges for financial companies, Steve Bartlett, head of the Financial Services Roundtable, said at a July 15 Newsmaker.

The organization represents 100 of the largest integrated financial services companies that provide banking, insurance and investment products consumers.

Bartlett neither endorsed nor opposed the legislation that President Obama signed into law July 21.

Bartlett said there is plenty to like and a good bit to question.

"We accept the reality of this legislation as a framework for regulatory structure," Bartlett said. "Our goal is to turn our attention from the uncertainty of legislative action to the certainty of the industry's commitment to make reform work, to take these legislative changes and the regulatory changes to follow, and make reform work for the American economy."

Bartlett said he saw promise in measures aimed at systemic risk regulation, capital standards and lending standards.

"These are core elements of the bill will contribute to a stronger, more secure financial system," he said.

He also warned that history has shown that new legislation often has the ability to create problems.

"In some cases, the benefits of the new law outweigh the problems created," Bartlett said. "In others, the medicine is worse for the patient than the disease. Specifically, there are four provisions that we believe fall into that category, and that could hurt the economy, consumers and small businesses more than they help."

Barlett cited interchange issues (what banks charge retailers for each debit card transactions), derivatives regulation, proprietary trading and minimum capital standards that are too high as areas of concern.

-- Frank Maisano, [email protected]