Mastitis

"The most significant changes promised by the Dodd-Frank Act that directly affect most depository institutions are the abolition of the Office of Thrift Supervision ("OTS") with reallocation of supervisory responsibilities among the remaining regulators and the Volcker Rule."

So say three lawyers writing about the financial reform bill.  Wrong.  Most depository institutions couldn't care less about the OTS, which regulates savings banks and savings and loans.  And most aren't that concerned about the Volcker Rule, either, which limits their involvement with proprietary trading (buying and selling securities products for their own purposes) and hedge funds.  

Maybe the big institutions, the ones who are used to paying high legal bills, do.  The smaller banks are more interested in how the Act affects everyday business.  The three lawyers, in their article on the Act, didn't even mention the new consumer watchdog, the Consumer Financial Protection Bureau, or the many new requirements regarding mortgage lending.  Oh well, maybe they'll get to those parts of the Act some other time.

Have you noticed that when you deposit checks in your account, the bank gives you $100 credit almost immediately and might place a hold on the remainder?  On or before the designated transfer date (see yesterday's posting), your bank will give you $200 credit.  That's a change banks may not be too happy about, since it doubles their risk if you deposit a bad check.  

If you apply for a credit card or a loan to take that trip you've been planning to Italy, and the bank turns you down because your credit score is too low, on or before the designated transfer date, the bank must disclose your score and some related information.  The bank's already accustomed (or should be) to providing this information in connection with mortgage loan applications.  Now it's going to have to do it for other types of loans.

Those are just two of many practical little things banks need to know about the new statute, but I'd bet you haven't heard about them.  Many banks probably haven't either.  

All of this is good for the book I'm writing.  Keep writing about the Less-than-Volcker rule, guys.

"Phew," says Virginia.  "Something got your goat?"

Last count, they were all there.  One might have mastitis, though.