May 26, 2009

Financial reform may aim beyond finance

The U.S. Treasury Department's financial reform package could wind up as a magnet that attracts legislation beyond its focus, a key Washington lobbyist said.

On top of the regulatory changes Treasury Secretary Timothy Geithner is expected to propose, The White House is considering adding a consumer protection board for financial products. New York Sen. Charles Schumer has already said he would like to add a shareholder bill of rights, to the package, Politico reported Tuesday.

Some reforms, like Schumer's proposal, may go beyond the financial sector and apply to all corporations, the political publication said.

In total, it's pretty clear that this is not about regulatory reform, though that cloak might be used for some of it. This is about an activist agenda, said Tom Quaadman, executive director of the U.S. Chamber Center for Capital Markets Competitiveness.

There are over 15,000 public companies in the U.S., and the vast majority had nothing to do with the financial crisis. They are trying to create a one-size-fits-all, said Quaadman.

After insurance giant American International Group Inc. required $180 billion in bailout funding, the Treasury's proposals include giving regulators authority to take over companies beyond banks, the newspaper said.