A few political notes
As we head into the Thanksgiving, I pass along these political notes:
First, Roger Stewart of the Maquoketa State Bank in Maquoketa, Iowa, announced he will not seek re-election to the Iowa Senate in 2010. Stewart, a former executive vice president, currently is a director at the bank. He also was responsible for credit review at the bank.
Stewart, a Democrat, was elected to the state senate in 2002. He is chairman of the Economic Growth Committee in addition to serving on other committees…
Second, Alexi Giannoulias is under a microscope as Illinois State Treasurer and the recipient of dividends from a bank in which he owns 3.6 percent of the stock. He explains that most of the dividends received from the $1.2 billion subchapter S Broadway Bank were used to pay taxes. But I doubt that the public has much of an understanding how the sub S structure works and why dividends to pay taxes are typical. Get the details in this Crain’s Chicago Business article. Giannoulias, a Democrat, is running for U.S. Senate…
Third, the U.S. Senate Banking Committee conducted a hearing on S. 1799 last Thursday. The bill regulates overdraft protection programs, which I wrote about earlier. The American Bankers Association notes that the Federal Reserve last week adopted final rules that prohibit financial institutions from charging consumers fees for paying overdrafts on automated teller machine and one-time debit card transactions, unless they opt in to the overdraft service for those types of transactions. Given these new rules which address consumers’ primary concerns on overdrafts, there doesn’t seem to be need for additional congressional action…
And fourth, Ken Guenther, the former head of the ICBA, points out in his blog that the the House Banking Committee last Thursday passed an amendment proposed by Rep. Ron Paul to give the General Accounting Office authority to audit the Federal Reserve. When I first wrote about this idea, I didn’t think it had any chance of advancing. Apparently the Fed has been politically weakened by the economic crisis. Guenther points out that GAO auditing is merely a step toward Paul’s real goal, which is to abolish the Federal Reserve. Guenther gives us this quote from Paul on Feb. 4, 2009:
Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. … The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. … In fact, Congress’s constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary policy envisioned by our nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold.
Nobody expects the Federal Reserve to go away, but certainly reform legislation will have a lot to say about the Fed’s authority, and there seems to be a serious effort to limit that authority as much as possible.
