Halfway Modernization Bill Would Be Good Start

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HR 10, the financial services modernization bill introduced last year by Rep. Jim Leach, R-Iowa, died because it tried to do too much the wrong way.

Though regulatory reform is much needed in the U.S. financial services industry, attempting to revive HR 10 would merely delay reform. Instead, financial services modernization must be rethought in a very fundamental way.

Fortunately last Nov. 8, the day that HR 10 effectively died, Rep. David Dreier, R-Calif., introduced a back-to-basics bill, HR 2940, which should stimulate this rethinking.

HR 10 had substantial flaws. For one thing, it addressed two distinct issues: modernization of the financial services industry and modernization of financial services regulation.

Electronic technology has been blurring distinctions among …