In this White House photo by Pete Souza, President Obama meets with regulators before announcing his Financial Overhaul Plan. President Obama has announced the most expansive overhaul of the nation financial institutions since the 1930’s.  The new plan is being framed as one that will provide more consumer protection and create a regulatory counsel for financial oversight.  The Fed would oversee financial institutions whose failure could threaten the stability of the entire banking system like insurance companies, which currently are not regulated.

The official summary of the plan includes recommendations that would:
a. Promote Robust Supervision and Regulation of Financial Firms
b. Establish Comprehensive Regulation of Financial Markets
c. Protect Consumers and Investors from Financial Abuse
d. Provide International Regulatory Standards and improve International Cooperation
For many Americans, the most important area of immediate concern is consumer protection.  The White House team believes that the overhaul plan will provide “transparency” and create responsible lenders and knowledgeable buyers. And according to President Obama, the creation of the new oversight council will “identify gaps in regulation” and “solve problems in oversight before they can become a crisis.”

The plan has wide Democratic support, but Republican opponents  to the plan see the “overhaul” as more government meddling. 
All elements of the plan have been created to address the pitfalls of the financial market that almost created chaos last fall and has been at the heart of our economic disaster.

The administration might want to begin reviewing in an aggressive proactive manner, the manner in which these same financial institutions are creating new strategies to recoop their losses. Over the last six months, you might have heard the beginning of the grumbling of bank and financial institution customers who are overwhelmed with new fees.  One is an old trick.

A consumer makes a deposit on time, and then two checks come through the banking clearinghouse.  The deposit is made after the checks hit the account or the largest check hit first, the sequence of calculated actions creates an overdraft fee ($35.00), then the second check hits the account creating a second overdraft fee ($35,00) and then the deposit is posted.  All checks will clear the account, but the bank has just made an extra $70.  

Now let’s add a new twist.  For every five days the account has a negative balance, it is accessed an additional $35.00.  Is this really better than a pay-day loan?
So it is possible, the very same banks, who reported higher than expected quarterly earnings, and the same banks that received “bail-out” funds paid for by taxpayers, will also stand to gain even more profit from those that were the target of the original scam, communities of color and working poor and the poor? In Obama’s comments he offered this thought, “The free market is not a free license to ignore the consequences of our actions.” This may not rise to the level of a national crisis, but it is indicative of the types of emerging action that created the door for “sub-prime” lending.

The president’s plan ran into skepticism last week where senators wanted to know if it would prevent another economic meltdown. economy. Lawmakers agreed that change was needed. Treasury Secretary Timothy Geithner defended the proposal as the nation’s best shot.