Obama: New Rules Will Keep 'Worst Traits In Check' (VIDEO)

AP: WASHINGTON President Barack Obama proposed new "rules of the road" for the nation's financial system Wednesday, casting the changes as an essential response to the economic crisis and the greatest regulatory transformation since the Great Depression.

Obama blamed the crisis on "a culture of irresponsibility" that he said had taken root from Wall Street to Washington to Main Street, and he said regulations crafted to deal with the depression of the 1930s were "overwhelmed by the speed, scope and sophistication of a 21st century global economy."

The Obama plan would give new powers to the Federal Reserve to oversee the entire financial system and would also create a new consumer protection agency to guard against credit and other abuses that played a big role in the current crisis.

In remarks prepared for delivery later in the day, Obama attributed much of the country's current problem to "a cascade of mistakes and missed opportunities" that happened over decades.

Visit msnbc.com for Breaking News, World News, and News about the Economy

The Fed's expanded authority and the rest of the new rules would reach into currently unregulated regions of the financial markets. An 88-page white paper released by the administration detailed an effort to change a regime that Obama's economic team maintained had become too porous for the innovations and intricacies of today's financial markets.

Obama said the plan was designed in consultation with lawmakers, regulators and the institutions it seeks to police.

"We seek a careful balance," Obama said.

The plan would do away with the Office of Thrift Supervision, replacing it with a system aimed at closing gaps in coverage and keeping institutions from shopping for the most lenient bank regulator. The consumer agency would place new restrictions on lenders and mortgage brokers, requiring them to offer simple loans to consumers.

"Mortgage brokers will be held to higher standards, exotic mortgages that hide exploding costs will no longer be the norm, home mortgage disclosures will be reasonable, clearly written, and concise," Obama said.

Comments

[nomorefed]

02:28 PM on 06/18/2009

Take back the trillions of $$$ given to the banks, who just sit on it and make it totally ineffective then start government incentive to create realistic industries that give employment and generate real productive income, some of which would hopefully be from exports.

Every other country, especially China and most of Europe have goverment incentives to protect it's industries. No matter what you call it it's a form of protectionism and its inevitable. We should stop being naive and take care of our own house. The only ones who win if we don't are the multinational corporations who don't care where they get their hand out.

recommended reading: http://www.bit.ly/12NCJR

Every other country, especially China and most of Europe have goverment incentives to protect it's industries. No matter what you call it it's a form of protectionism and its inevitable. We should stop being naive and take care of our own house. The only ones who win if we don't are the multinational corporations who don't care where they get their hand out.m

[nomorefed]

02:27 PM on 06/18/2009

Take back the trillions of $$$ given to the banks, who just sit on it and make it totally ineffective then start government incentive to create realistic industries that give employment and generate real productive income, some of which would hopefully be from exports.

Every other country, especially China and most of Europe have goverment incentives to protect it's industries. No matter what you call it it's a form of protectionism and its inevitable. We should stop being naive and take care of our own house. The only ones who win if we don't are the multinational corporations who don't care where they get their hand out.

recommended reading: http://www.bit.ly/12NCJR

Every other country, especially China and most of Europe have goverment incentives to protect it's industries. No matter what you call it it's a form of protectionism and its inevitable. We should stop being naive and take care of our own house. The only ones who win if we don't are the multinational corporations who don't care where they get their hand out.

[dsws]

07:30 AM on 06/18/2009

He says there's too much debt and not enough capital. But how much of his audience understand what that means? People think of debt as something someone has to pay, and capital as something that someone has. But every bond is something that a bondholder has, and every share of stock is something that a firm has to pay dividends on. And then there are financial assets that are neither stocks nor bonds: it's not a simple matter of debt and capital.

[steveherb]

07:12 PM on 06/17/2009

Passive thinking. Recind our mortgages or face the fines. Exercise the Federal Laws Before foreclosure. Title 18 Part 1 crimes Chap 47 sect. 1005, 1006, 1011,1014.

http://www.law.cornell.edu/uscode/18/usc_sup_01_18.html

Too many foreclosures for a burden of proof to blame it on the home owner. Mr.Irresponsible name caller.

[Pumpsie]

06:45 PM on 06/17/2009

Increasing the power of the Federal Reserve Banking System is a non-starter for me. The Fed helped create this crisis just so they COULD increase their powers...and Obama is being a good boy and playing along setting the Fed up as the agent that is going to save us. We should be going in the very opposite direction...towards the elimination of the Federal Reserve which is constitutionally illegal anyway and is ruining our nation, one printed bill at a time. The game here is to give the Fed increased powers that will be added to over time until the Fed is in control of every bank in the U.S. THEN, when the eventual other shoe drops, and it will, and the U.S. government itself is broke, it will be an easy, simple move to place the Fed System under a worldwide banking system under the control of a few mysterious oligarchs named Rothschild, Rockefeller, and a few of their friends. Right now, that's too difficult to do, as there are too many banks. This new bill takes the United States one step closer to its dissolution and to our financial slavery by simplifying that step. We'll ALL be "working for the Pharoah" if this bill gets passed unchanged. Dennis Kucinich and Ron Paul, you're our only hope.

[ThatOne4Me]

06:55 PM on 06/17/2009

I'm afraid you're right. The writing is all over the wall.

[robbrian]

08:07 PM on 06/17/2009

We now have conclusive evidence that President Obama is a slave on the plantation of the Global Central Bankers who control the sovereignty of the United States.

Obama suspects that Presidents Lincoln, Jackson, Garfield, McKinely, Roosevelt and Kennedy were either assasinated or shot at because they opposed the Money Trust---Central Bankers. He, therefore, will bend over and further dilute whatever control this government had over the Federal Reserve System.

OBAMA wants to prevent financial dysfunction by putting the creator of same in charge of the process. Who was responsible for the 1939 Depression? The Fed. Who created the bargain basement sale on money between 1988 and 2005? The Fed. Who tightened the money supply in 2007? The Fed. Who issues more debt than any other entity in this nation? The Fed. Who creates inflation through its fractional reserve banking system? The Fed. And OBAMA wants them to regulate everyone else!! Who regulates the Fed? No public or quasi-public entity has been able to reign in the Fed since its inception in 1913. Regulation is needed, but more critical is the need to place the control of our sovereignty in the hands of elected officials and the very competent Treasury Department personnel, absent Giethner and his lackyes.

Just think about it, you've heard the adage, "The man with the gold makes the rules," WELL! That puts the Fed in charge of everything. A privately run bank governing America. How's that work for you?

[blimie]

08:38 PM on 06/17/2009

You said it. We will have a private run bank governing America. He just magnified their powers.

[Coastalthinker2]

06:29 PM on 06/17/2009

If we honestly return to serious oversight of our financial institutions, then this will be a great moment for President Obama. If however, this is just a way to provide more power for the central bank, the Federal Reserve, then very little will change. I truly hope this is a positive step and moves in a positive direction.

[robbrian]

08:08 PM on 06/17/2009

Prepare for your worst fears.

[raven29520]

05:54 PM on 06/17/2009

It really doesn't matter to me who oversees what. I am just concerned over the loopholes that banks and other loan officers have been using. I would like to see the financial market get back to when you took out a loan you understood the agreement and you made your payments. You could put up land or other property for collateral. If you paid back your loan according to the simple terms then you could get another loan. That was your earned credit. Now we have to deal with unlawful credit markets.I say do away with the credit markets. What purpose do they serve?Corporations file bankruptcy and open next week in another name same management. The corporation is doomed but the management that caused the problem is not suffering bad credit reports.When in fact, it was a member of management that signed for the loans. Yet an individual takes out a loan and the loaning officer changes the terms or failed to point out the fact that terms could change resulting in a late payment, default or other and a person is ruined x 7 years. No new job. Higher insurance. No way out. What do they do? Should they change their name or make a claim that in fact the item in question was a corporation and they were just managing the account therefore they are not responsible. Or better yet, make a claim that one's soul is not responsible for the material body.

[diffrntdrummr]

05:46 PM on 06/17/2009

I'm sorry Mr. President ,but one of the worst "traits" of Wall Street is the total coruptability of the ratings agencies. If you don't fix that, you haven't fixed anything!

[thnk4selfagain]

05:20 PM on 06/17/2009

Just a question for Timmy: was this proposal also written by "Davis Polk & Wardwell, a law firm that represents many banks and the financial industry’s lobbying group"?

http://www.nytimes.com/2009/04/27/business/27geithner.html?pagewanted=1&_r=2&hp

[branchwater1113]

05:10 PM on 06/17/2009

When Obama says the regulatory regime devised during the 1930s was overwhelmed by the crisis of 2009, he's dead wrong. In fact, the financial regulatory structure that served us well for decades following the Depression was dismantled by 30 years of Reagan Revolution. We have, in fact, been essentially regulation-less in the financial sphere for the past 8 years.

Thanks to Republican laissez faire policies, our whole society has been raped and pillaged by a few oligarch who call the shots and gather the spoils of international finance and business.

[Coastalthinker2]

05:22 PM on 06/17/2009

Exactly. However, will these policies change when we have Geitner, Summers and others who continue believing in the Friedman mantra? This is a major area where President Obama is showing inexperience as a leader because he seems to blindly follow them. I wonder what percentage of the population in this country realize that Timothy Geitner is "okay" with turning to a global currency.

[Coastalthinker2]

05:42 PM on 06/17/2009

Oops, Geithner, not Geitner.

[thnk4selfagain]

05:31 PM on 06/17/2009

Yes, Greenspan, Rubin, Summers, Graham, Gensler, Geithner, Bernanke, Cox and too many others can all wipe their brows.

[texasteph12570]

04:56 PM on 06/17/2009

hows that socialism thing workin out for ya?
yea i know its a pain having to lie to people just to get the first step of your agenda through. hey but once youve got your foot in the door your economic justice platform will straighten things out. lets take all of the compensation from those who have gotten up every day worked two jobs while going to college, , who never calls has in sick, always takes one for the team as it were, is on call 24/7 even on vacation, and as such has been promoted and compensated in various methods, like my husband has, and give the bread of their labor to those who have been less serious about life. to those who would accept a handout. thats not what this country was founded upon. our grandparents would never accept a handout unless they were about to die. have you you no pride in yourselves that you would submit to the hand that feeds you? oh i feel so sad for you poor misled souls. you have no idea what you and your hippie parents have done. what happens when the only country in the world that stands up to defend democracy and freedom, doesnt stand up anymore? well america we are about to find out. would you rather that russia or china be the leader of the free world? they are awesome at looking after their citizens.

[15steps]

06:41 PM on 06/17/2009

do you even know what socialism is?

here's some help:

Socialism refers to any one of various economic theories of economic organization advocating state or cooperative ownership and administration of the means of production and distribution of goods, and a society characterized by equal opportunities/means for all individuals with a more egalitarian method of compensation based on the full product of the laborer.

Obama is the furthest one from a socialist, ideologically speaking. he is tightening regulations so that we don't have to go through this again

as a republican, you are probably really proud of bush and his 'successful' policies.

you fail to realize that most people that accept the 'handouts' have been suffering in this economy the same as you. most have been laid off and are searching for jobs that aren't there. please tell me how the people on your side of the fence would fix this.
.

right

[Susan Cain]

04:52 PM on 06/17/2009

If I have heard the news correctly the most stunning part of these changes is that the Federal Reserve will be in complete control and all will answer to this organization. The American people have been hoodwinked big time.

[Coastalthinker2]

05:08 PM on 06/17/2009

Yes. The Federal Reserve is NOT PART OF THE FEDERAL GOVERNMENT but the Central Bank in the United States.

Here is info from their website:
http://www.federalreserveeducation.org/fed101/index.htm?CFID=5562116&CFTOKEN=66732742

Unfortunately, many people will just assume this is great because the government will have more regulations.

[robbrian]

08:15 PM on 06/17/2009

You might also want to visit http://www.webofdebt.com to get a sense of why we have been duped about the deficit. We don't really need to have debt if we don't have to pay the private central bank interest on the thin air money they generate and "lend" to the government.

[2tango]

04:34 PM on 06/17/2009

To all republican here, if you all think can do better, why we are in a depression now after 8 years of republicans in power?

And all started with Reagan (free-enterprise) Fallow by Bush Sr. (Incompetence) then Clinton's Master-Illussionist) and finally...The abomination on 2 legs= bush

So republicans what is that you are so proud of?

[Lorianne]

04:50 PM on 06/17/2009

It started before Reagan, but you're right. Every administration going back 30+ years had a hand in this meltdown. Also, the American people took the bait of unsustainable levels of consumption based on unsustainable levels of consumer dbt had a hand in this meltdown.

Nobody gets a pass.

[robbrian]

08:16 PM on 06/17/2009

You might also want to visit http://www.webofdebt.com to get a sense of why we have been duped about the deficit. We don't really need to have debt if we don't have to pay the private central bank interest on the thin air money they generate and "lend" to the government.

[opine2u]

04:05 PM on 06/17/2009

Anyone who doesn't agree with Obama gets the Bush thrown at them, not the book.

[PuzzledinPeoria]

03:57 PM on 06/17/2009

What if they had to obey a three word law: DON'T CHEAT PEOPLE!

[cruzking2000]

04:23 PM on 06/17/2009

Lawyers from the firm, Wii, Cheatam, and Howe, would have a field day with that one simple little ole law. Ha!