A Look at Both Sides of the Issue: Financial Regulatory Reform

Van Munching Hall filled with cameras and lights as C-SPAN prepared for the Robert H. Smith School of Business’ Center for Financial Policy’s (CFP) Congressional Briefing Series. CFP’s Congressional Briefing Series brings current and former Capitol Hill staffers to the Smith School to discuss financial policy and legislation. Students, faculty, and staff gather to hear and participate in what’s happening on the forefront of financial policy. For this series, CFP brought in two former staffers to discuss and debate recent financial regulatory reform from the perspectives of both Republicans and Democrats.

On Friday, March 29, 2013, for the first part of the series, CFP invited Aaron Klein, director of the Financial Regulatory Reform Initiative at the Bipartisan Policy Center. To explore the other side of the issue, on Wednesday, April 23, 2013, CFP brought in Andrew Olmem, most recently the Republican deputy staff director and chief counsel at the U.S. Senate Committee on Banking, Housing and Urban Affairs.

Klein previously served at the Treasury Department as the deputy assistant for economic policy and policy coordination, where he helped craft and pass the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and played a leading role on Troubled Asset Relief Program (TARP) implementation. He also served as chief economist for the Senate Banking, Housing and Urban Affairs Committee prior to 2009.

As Republican deputy staff director and chief counsel at the U.S. Senate Committee on Banking, Housing and Urban Affairs, Olmem saw the passage of GSE reform, TARP legislation and the Dodd-Frank Act. He was a lead staff negotiator for the Dodd-Frank Act and played a key role in the debate.

Klein discussed the importance of TARP, stating that “without the passage of TARP, things would have been much worse than they are today” and that one big misconception around the legislation is that is cost $700 billion, when it cost much less and may have even been profitable.

A video of the Klein talk is available on C-SPAN’s website.

Olmem explained to the audience that “Dodd-Frank gave substantially more authority to federal agencies, but less accountability” and that there is little in Dodd-Frank that lays out an approach to measure performance of the implementation of the act and adjust along the way.

Although in disagreement on the effectiveness of the current financial regulatory reform, both staffers left the audience with some advice that works on both sides of the aisle.

Klein:

• Give back to the community and integrate community service with career.
• Beware of a deterioration of the perspective of motives from the other side. Policymakers on both sides are generally trying to do the right thing and want to make America better, even if they disagree on how to do it.

Olmem:

• Respect the congressional process. After working directly with it, the process is a good, proven process that can self-correct.
• The best protector of a financial system is an informed public.

Rachel Hester, Office of Marketing Communications