The compromise reached by negotiators on financial regulation reform is far from perfect, Sen. Bob Corker (R-Tenn.) and member of the Senate Banking Committee, told CNBC Friday.
Work on the bill has just begun, and legislators will spend the next decade correcting mistakes and ironing out details, but “(i)n this environment, it’s kind of what one might expect,” Corker said.
The bill faces approval of both houses of Congress, but could be signed into law by President Barack Obama by July 4.
“It’s an overreach in a lot of areas. In ways that are not essential or not related,” while some of the core areas that are very important have gone completely untouched, Corker said.
“We did not deal with Fannie and Freddie. The underwriting provisions should have been much stronger,” he said.
Positive amendments were made to the Volker rule, in Corker's opinion, as more clarity was given in the 11th hour.
Watch the video of the interview on CNBC
“There was some flexibility built into it,” but, “it’s not the product I’d like to see our country have as it relates to regulation,” he said.
“Obviously the swap desks push out is totally irrelevant, totally a waste. Especially with the Volcker rule having been enacted,” he added.
Regarding derivatives legislation, Corker said they achieved positive steps towards listing more and more instruments on the clearing platforms. On the downside, legislators failed to include exceptions for companies using derivatives to legitimately hedge their exposures for commercial purposes, he said.
From a hedging standpoint, “(m)any companies will put up capital non-productively in ways that aren’t making our country safer,” and this will hurt the prospects for job creation, he said