West Wing Report: June 25, 2010

President Obama heads to Toronto this morning for weekend meetings with leaders from the world's top industrialized nations - the so-called G-8 and broader G-20 summits. Obama has been working the phones for the last week or so, telling other leaders he’s worried that the global economy is still weak, and that the U.S. and other countries should not back away too quickly on stimulus plans.

Obama will arrive knowing that a key goal of his administration is a step closer to fruition: a landmark bill overhauling financial regulations. It would be th ebiggest overhaul since the Great Depression and change the way markets and the government interact for decades to come. Both the House and Senate are expected to vote on final legislation within days, and the President could sign a bill by July 4th. Here are the key points:

Derivatives: For most of the 20th century, there was a wall - called the Glass-Steagall Act - between your bank and big Wall Street investment banks; one couldn't dabble in the other's business. That wall came down in 1999 and a decade later came the near collapse of the U.S. economy. That wall is now being rebuilt, meaning commercial lenders won't be able to underwrite or trade things like mortgage-backed securities or collateralized debt obligations that are widely blamed for the market collapse.

Consumer Bureau: The bill would create an independent Consumer Financial Protection Bureau, which would would write and enforce rules for most banks, mortgage lenders, credit-card and private student loan companies. The "CFPB" would be part of the Federal Reserve.

Credit Scores: You've always been able to get free credit reports from private-sector companies like Equifax or Eperian. Now you'll be able to see if your credit score (your FICO) has been hurt by anything in these reports, which will help when and if you apply for a loan.

Mortgages: Those "liar loans" that helped banks give hundreds of thousands of dollars to applicants who couldn't afford them are a thing of the past. Sensible as it may seem, lenders will have to check borrowers’ income and assets. Many lenders that didn't do this during the real estate boom are now out of business. Other rules include a ban on prepayment penalties for people with adjustable rate and other more complex types of mortgages. And mortgage brokers will no longer be able to earn bonuses based on the type of loan they put you in.

Fiduciary Duty: The Securities and Exchange Commission will create a a new rule for brokers that requires them to put their clients’ interests first - as opposed to trying to generate fees for themselves by sell clients products they don't need.

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Unemployment Benefits Expiring

Speaking of the economy, the White House this morning is blasting what it calls “obstructionism” by Senate Republicans for blocking more benefits for the unemployed. The Republicans say that’s not accurate. What IS accurate is that 1.3 million Americans will lose their final assistance this week, unless something is done.

Here’s the broader issue: States are looking at budget gaps of $127 billion dollars thru 2012. The gaps are so big, the Pew Center on the States is warning of "havoc" as they try and stem all the red ink. One top Wall Street analyst says the states may have to layoff some two million people.

The dilemma for the federal government: help the states again, and run up the deficit still more, or slash federal aid - and let the states cut all those jobs - including those of firemen, cops and teachers.

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President's Schedule

10:30AM THE PRESIDENT arrives in Toronto, Canada
Lester B. Pearson International Airport
Travel Pool Coverage

11:20AM THE PRESIDENT arrives in Muskoka, Canada
Deerhurst Resort Landing Zone, Muskoka, Canada
Travel Pool Coverage

12:15PM THE PRESIDENT attends the G8 working lunch
Deerhurst Resort
Closed Press


2:00PM THE PRESIDENT and G8 Leaders take a G8 Family Photo
Deerhurst Resort
Limited Pool Spray at the top


2:45PM THE PRESIDENT participates in G8 Session with African Outreach Leaders
Deerhurst Resort
Limited Pool spray at the top



4:45PM THE PRESIDENT participates in a G8 working session with African Outreach Leaders and Expanded Outreach Leaders
Deerhurst Resort
Limited Pool spray at the top


5:45PM THE PRESIDENT, G8 Leaders, African Outreach Leaders and Extended Outreach Leaders take a G8 Family Photo
Deerhurst Resort
Limited Pool spray at the top


7:30PM THE PRESIDENT and G8 Leaders meet with My Summit 2010 Youth
Deerhurst Resort
Limited Pool spray at the top


7:45PM THE PRESIDENT attends the G8 Working Dinner
Deerhurst Resort
Closed Press


9:15PM THE PRESIDENT attends the G8 Working Dinner
Deerhurst Resort
Closed Press