Friday, October 3, 2008
Hidden in the Emergency Economic Stabilization Act of 2008
In yesterday’s Senate bailout bill, also known as the ‘‘Emergency Economic Stabilization Act of 2008’’ is the following, seemingly innocent section.
SEC. 128. ACCELERATION OF EFFECTIVE DATE.
Section 203 of the Financial Services Regulatory Relief Act of 2006 (12 U.S.C. 461 note) is amended by striking ‘‘October 1, 2011’’ and inserting ‘‘October 1, 2008’’.
So they moved the date of the Financial Services Regulatory Relief Act of 2006 up by 3 years. Big deal you say, and what the heck is the FSRRA of 2006? It was a series of amendments to 12 U.S.C. 461 of course! Well, okay, I don’t expect you to know what that is, so here it is (and the other related documents).
The bailout bill - http://money.cnn.com/2008...
Financial Services Regulatory Relief Act of 2006 - http://www.govtrack.us/co...
12 U.S.C. 461 - http://www.law.cornell.ed...
You may want to open those in new tabs, we’ll be bouncing around them a bit.
Okay, lets follow the trail.
They changed the effective date from 2011 to yesterday!
The Financial Services Regulatory Relief Act of 2006 made changes to the United States Code TITLE 12 - BANKS AND BANKING, CHAPTER 3 - FEDERAL RESERVE SYSTEM, SUBCHAPTER XIV - BANK RESERVES.
The changes do a few things, none of which seem to be good for us citizens.
The changes eliminated the requirement for banks to keep reserves of cash on hand to cover deposits, they abolished the Federal Reserve’s Earnings Participation Account, they granted the ability for the Fed to create their own rules for distributing their earnings, and they granted the ability to make payments to foreign banks.
These things were not scheduled to go into effect for 3 more years. Unclear is why they needed these changes at all, the other is why they need them now. Full Story.