Local financial advisors question banking reform proposals

Local financial advisors evaluate proposed Wall Street reforms. / NBC News

President Obama called for swift action on legislation in Congress designed to overhaul the nation TMs monitoring of the financial markets.

"These are reforms that would put an end to taxpayer bailouts; that would bring complex financial dealings out of the shadows; that would protect consumers; and that would give shareholders more power in the financial system, Obama said in New York Thursday.

The legislation would create a new regulatory oversight committee to prevent another meltdown like the one in 2008. It would launch an early warning system to detect potential problems in the markets. Included is a controversial $50 billion liquidation fund to help wind down failing firms. The bill would provide further regulation to hedge funds and keep an eye on derivatives, assets with value determined by other assets.

The reforms worry some local financial advisors who say it could cost their clients more money.

What are the fees and taxes?, asked David Boike of Retirement Resources in Flint. If we raise taxes through these various programs, it TMs going to have a negative effect on those accounts, Boike said.

Analysts such as U-M Flint Economics Professor Chris Douglas said the reforms show federal regulators are aware of the weaknesses in the system. However he and Thomas Alexander, professor of banking and finance at Northwood University said the cause of the 2008 financial collapse was government.

The root cause of it is the government policies; giving loans to people who couldn TMt afford them, Alexander said. Now (lawmakers) are trying to blame Wall Street and they are beating up on the very same financial system that we need to get out of a recession and have a strong economy.