If you’re watching what’s going on in the U.S. economy, you’ve seen the government making numerous attempts to return from recession.  Banks have been helped, homeowners rescued, and plans drawn up for rewriting financial laws.

But now, some major business organizations are banding together to fight the U.S. Treasury’s plan to overhaul the nation's patchwork of financial regulation, less than two weeks after the proposal was unveiled.

Treasury Secretary Henry M. Paulson Jr’ broad blueprint for consolidating federal oversight of financial institutions and markets was introduced on March 31. Since then, lobbyist representing small banks, insurance agents and credit unions have come forward to argue that the plan would help big Wall Street firms while harming smaller companies that cater primarily to local communities.

"The winner was Wall Street, and the loser was Main Street," said Camden R. Fine, president of the Independent Community Bankers of America about the blueprint. "We are talking to a number of financial services trade organizations about coordinating efforts and, surely, we'll have a lot of partners."
"We are all united in having a problem with the overall Treasury proposal," said Robert Rusbuldt of the Independent Insurance Agents & Brokers of America.

The Treasury's initiatives would end the current system of regulation over the coming decade and substitute three powerful agencies that would oversee banking, market stability and consumer and investor protection. The plan's proponents say such changes are needed because government oversight has not kept up with the pace of innovation in the financial markets.

Other groups talking about forming an opposition coalition include the Conference of State Bank Supervisors, which represents state bank regulators, and the Credit Union National Association.

Like insurance agents, bank supervisors heading to Congress. Last week, the organization used their annual “fly-in” to head to Capitol Hill to complain about the Treasury proposal. They believe the plan would lead to the elimination of state banking charters, which they oversee. The supervisors said these have kept local banks safe and sound for decades.

The country's business lobby is split over the Treasury proposal. Groups that represent larger companies, which often do business across the country, tend to be more supportive of the plan than those that represent smaller, more local entities. The U.S. Chamber of Commerce and the Business Roundtable speak highly of the Treasury's effort, while not endorsing all of its elements.
Here at gibLink, we generally favor anything that looks forward to helping the U.S. as well as the rest of the world’s economies out of the current slump.  But we ponder the idea of additional regulation and restrictions.  And we prefer an approach that further assists the small business, which statistics show will be the backbone of any economic recovery.  Small businesses must be the focus of this “recession repair” as they make up the major of payrolls, jobs, and business done around the world.

Many of our members will need a little extra assistance in getting through the coming difficulties.  We want everyone to do that with the full protection of the law, but if these new regulations would further limit access to financing or even mortgage equity (often a key factor in financing the small businessperson’s growth efforts) we view that as a problem.

Daniel A. Mica, president of the Credit Union National Association, gives the blueprint little chance of moving ahead in Congress anytime soon.
Nevertheless, Mica said, his members have been outraged, and he has had to ask them to mute their response to avoid "overkill." They fear credit unions might disappear under a different regulatory scheme, which won’t help any recovery that might be looming on the business horizon. 

Stay tuned for more information as we continue to watch this recession for more opportunities to grow and thrive together.