Dodd-Frank Reform (Part 2): Background on the CHOICE Act

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My recent blog on the CHOICE Act talked about what’s broken in Washington, DC. Here’s a little more detail on the political wrangling that went on behind the scenes when the CHOICE Act went before the House Financial Services Committee for markup. (CHOICE)

The Democrats decision to offer no alternatives or amendments to the proposals in the ACT, although unusual, is being seen by some policy analysts as a smart political move. In doing so, they “spared” members of the House from having to make some difficult decisions on what is offered in the Act. I thought that was the job of our elected officials.

Anyone can make the easy decisions; it’s the tough ones that count. Somebody has to step up and do what’s right.  It also allowed them to play their cards very close to the vest, not tipping their hand on other compromises they may want to offer somewhere down the line.

It seems that many lawmakers are uncomfortable having to make a tough decision on an amendment to the ACT dealing with the cap on debt interchange fees currently in Dodd-Frank. Such a vote might put them at odds with their constituencies in retail and banking. Better to avoid the vote so they don’t upset either party than analyze what’s right and make the vote, or offer some positive alternatives. Forget what’s best for the consumer; don’t upset the special interests.

Don’t get me wrong. I’m not pushing the Bill either way. I personally believe it has some good things, as outlined in MBA’s letter to Congress of September 12, 20116. (Letter)

These issues should be seriously considered and debated. It is irresponsible to dismiss them outright in total, without any serious discussion.

So, it’s business as usual in Washington, DC. Stand on the status quo. Don’t do anything controversial that might upset the special interest groups or the lobbyists. If you never make a decision, you can never be wrong. Is that what’s best for the people, the industry, and the nation. I doubt it.

Get involved. Make your voice heard on the CHOICE Act. Hold your elected officials accountable for their actions and non-actions.

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.