Financial Reform Law Aims to Change Some Ways of Wall Street

September 3rd, 2010 at 02:46am Under Economy Report

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This is the VOA Special English Economics Report.

On Wednesday, President Obama signed into law the Wall Street Reform and Consumer Protection Act.

BARACK OBAMA: “These reforms represent the strongest consumer financial protections in history — in history.”

Together, the changes represent the biggest rewrite of financial rules since the Great Depression. At the heart of the two thousand three hundred pages in the bill are promises to protect average Americans.

Congress agreed to create a Consumer Financial Protection Bureau. But the Federal Reserve will pay for it. The central bank will budget about five hundred million dollars a year.

Travis Plunkett is legislative director of the Consumer Federation of America, a consumer rights group. He says this new independent office will have a lot of responsibility — and that is a good thing.

TRAVIS PLUNKETT: “We’re going to have one federal consumer financial protection bureau. If it succeeds, people will know it. If it fails, people will know it. And they will try to hold it accountable.”

The bureau will set rules for the marketplace and enforce existing laws. One goal is to keep home buyers from getting bigger loans than they can pay for. But two areas where the bureau will not have power is over auto lenders or banks with assets of less than ten billion dollars.

Financial interests spent millions fighting the bill. The House of Representatives passed its version in December. Last week the Senate voted final approval with the aid of three Republican senators.

House Minority Leader John Boehner called the financial reform bill “ill conceived.”

JOHN BOEHNER: “I think it’s going to make credit harder for the American people to get, clearly harder for businesses to get.”

But President Obama says Wall Street took irresponsible risks that threatened the financial system.

Under the new law, banks no longer can own or invest in certain trading operations. The government has new powers to seize failing financial companies. These include businesses that, during the financial crisis, were considered “too big to fail.”

And President Obama says the law does something else.

BARACK OBAMA: “Finally, because of this law, the American people will never again be asked to foot the bill for Wall Street’s mistakes. There will be no more tax-funded bailouts. Period.”

Regulatory agencies will write hundreds of new rules for banks and other financial companies. This follows years of deregulation.

Opponents in Congress say they will try to block some measures in the new law. But even if those efforts fail, it is too soon to know just how strong the new rules will be.

And that’s the VOA Special English Economics Report, written by Mario Ritter.  You can comment on our program at voaspecialenglish.com.  And follow us on Facebook, Twitter, Youtube and iTunes at VOA Learning English.  I’m Steve Ember. I’m Steve Ember.

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Inventors Given Hope on Patents for Business Methods

August 25th, 2010 at 07:23am Under Economy Report

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This is the VOA Special English Economics Report.

Recently, the United States Supreme Court decided a case on the property rights of inventors. The question was whether a business method is enough of an invention to receive a patent. Patents are a form of intellectual property. They give legal protections to individuals and companies against the copying of their inventions.

Bernard Bilski and Rand Warsaw wanted to patent a method to let traders protect against the risk of price changes in energy markets.  The United States Patent and Trademark Office said no.

So the inventors went to court. Again they were told no. Finally, the case went all the way to the Supreme Court. Last month, all nine justices said no.

But they only said no to a patent in this case. Patent lawyer Meredith Martin Addy in Chicago explains that the court ruled narrowly.

MEREDITH MARTIN ADDY: “The Supreme Court held that there is no categorical rule denying patent protection for business method patents.”

When patent laws were first developed, most patents were for machines. But since the late nineteen nineties, inventors of business methods and processes have increasingly sought patent protection.

Technology companies, especially software makers, watched the case closely. They were concerned that the Supreme Court would require a test of some kind that could limit what can be patented.

In its ruling, the court decided against the patent only because the idea was too abstract. Law professor Michael Meurer of Boston University gives a famous example from physics. It involves the relationship of energy, mass and the speed of light, written as the letter c.

MICHAEL MEURER: “The Supreme Court has said, for example, if Albert Einstein determined that E = mc² — which he did — he never would have been able to get a patent on that. That’s too abstract.”

In the Bilski case, the court said patent examiners could consider what is known as the machine-or-transformation test. This is the idea that a patent should be given to a machine or something that creates a material change, like a chemical process.

But a majority of justices said patent examiners must also protect innovation. Patent lawyer Meredith Martin Addy says no one wants to suppress creativity.

MEREDITH MARTIN ADDY: “You can have that test, but it can’t be an exclusive test because of the nature of the patent laws which are to protect new and unknown inventions.”

Now, more cases will be needed to define the legal limits of business method patents. Such patents already exist. In March, for example, after re-examination, Amazon.com received a patent for its one-click ordering process.

And that’s the VOA Special English Economics Report, written by Mario Ritter. I’m Steve Ember.

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