Foresters are expected to approve a proposal that would prevent a new federal rule from taking effect that would make it harder for banks to keep their customers’ money on the books.
The Federal Reserve Board on Wednesday voted 6-3 to advance the proposal, which would require banks to report their customers and creditors information in a more timely fashion.
The rules are intended to help reduce the risk of financial collapse, but some consumer advocates say they will actually put a damper on people’s ability to keep money safe.
Foresters say the rules would prevent banks from charging fees that can harm their customers.
Foresters have proposed a similar rule several times, but the latest version would make the banking system more transparent and better track transactions.
They say it will help keep banks safe and prevent the financial system from becoming a “fiscal cliff” for the country.
But the banking industry says the proposed rules will have a devastating effect on its business.
“We’re very concerned that the Federal Reserve will make it more difficult for us to compete for our customers and our clients, and that this could be a recipe for financial collapse,” said Joe R. Sullivan, president of the National Association of Realtors.
The rules are expected in the coming days and months.
In an op-ed in The Wall Street Journal, former Vice President Joe Biden said the rule is necessary to prevent a financial crisis.
“In the next decade, it will take every American taxpayer to fund our financial system,” Biden wrote.
Some consumer advocates worry that the proposed regulations will make financial institutions more transparent, but that won’t hurt their business.
“I don’t think it will affect our business in any way, but it’s going to make it difficult for our banks to compete and our banks won’t be able to keep our customers safe,” said Mark Smith, president and CEO of the Independent Community Bankers of America.
A group of more than a dozen consumer advocacy groups wrote to Fed Chair Janet Yellen earlier this year urging her to reject the rule.
As a result, the Fed has proposed a proposal to let the rule take effect in a few weeks.
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