The Dems are about to pass the Financial Reform legislation (HR 4173)--the House passed the amended conference version on June 30th. It's supposed to reduce the risks of future credit crunches--though it does nothing to fix Fannie and Freddie, which were at the core of the melt-down. Instead, it adds a bunch of costly new requirements, overseen mainly by the same regulators that failed last time--which will hurt both banks and job growth--paid for by at least $11 billion of TARP funds, i.e., taxpayers.
Even worse, along the way, Congressional Democrats tossed in provisions to please their progressive constituency, says economist Diana Furchtgott-Roth on RealClearMarkets:
I was searching the bill for a provision about derivatives. What did I find but Section 342, which declares that race and gender employment ratios, if not quotas, must be observed by private financial institutions that do business with the government. In a major power grab, the new law inserts race and gender quotas into America's financial industry.So, the about-to-pass Financial Reform legislation's not just a bad law about banking. It's a quota bill. Courtesy of our community-organizer-in-chief.
In addition to this bill's well-publicized plans to establish over a dozen new financial regulatory offices, Section 342 sets up at least 20 Offices of Minority and Women Inclusion. This has had no coverage by the news media and has large implications.
The Treasury, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the 12 Federal Reserve regional banks, the Board of Governors of the Fed, the National Credit Union Administration, the Comptroller of the Currency, the Securities and Exchange Commission, the new Consumer Financial Protection Bureau. . .all would get their own Office of Minority and Women Inclusion.
Each office would have its own director and staff to develop policies promoting equal employment opportunities and racial, ethnic, and gender diversity of not just the agency's workforce, but also the workforces of its contractors and sub-contractors. . .
Lest there be any narrow interpretation of Congress's intent, either by agencies or eventually by the courts, the bill specifies that the "fair" employment test shall apply to "financial institutions, investment banking firms, mortgage banking firms, asset management firms, brokers, dealers, financial services entities, underwriters, accountants, investment consultants and providers of legal services." . . .
With the new financial regulation law, the federal government is moving from outlawing discrimination to setting up a system of quotas. Ultimately, the only way that financial firms doing business with the government would be able to comply with the law is by showing that a certain percentage of their workforce is female or minority.
The new Offices of Women and Minorities represent a major change in employment law by imposing gender and racial quotas on the financial industry. The issue deserves careful debate -- rather than a few pages slipped into the financial regulation bill.
Carl Horowitz at Townhall:
If the Senate approves the measure -- it is set to begin debate shortly -- Congress once more will have made clear that it views institutional safety and soundness as a lesser priority than achievement of demographic "diversity" among borrowers.(via reader Doug)