The recent proposal from the Treasury Secretary to revise how Wall Street operates and is regulated has been largely greeted with well-aimed criticism, and even some yawns because it seems to be just good old-fashioned politics. To many it goes way too easy on the finance industry at a time when it should give it more chaos-avoiding, meaningful direction. There are, though, a couple of proposals that merit a further look.
One of them is the mortgage lender issue. The plan seeks to set up a Mortgage Origination Commission that would draw up a draft of federal home loan licensing standards and other important industry-related issues. The sector does really need to be upgraded to streamline the current mishmash of state and federal regulations. Consider this. Some states have a highly efficient and demanding licensing regimen and others have none at all. A federal mandate here would go a long way to instill required professionalism to the originator arena.
The other noteworthy idea is to scale back on the number of federal jurisdictions currently monitoring the huge financial system. It's not only that there are too many of them, but some of their functions overlap. How are two separate agencies supposed to effectively oversee the same banking function? That's tough and really irrational.
The proposal aims to change at least some of that. For instance, the Federal Reserve would assume the supervision of all the day-to-day banking activity, consolidating it into one single department from the present five. That would give the crucial responsibility the teeth it needs under one roof.
Still, the government's focus should now be on the present crisis, solve its imbalances and shortcomings in a timely manner before it gets even worse and then, predictably months from now, begin debate on the overhaul.
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