The 17 Democrats selling out on bank regulation is worse than it looks

[babylonsister]

https://www.vox.com/policy-and-politics/2018/3/6/17086452/democrats-dodd-frank

The 17 Democrats selling out on bank regulation is worse than it looks
There was room for a deal, but they did a giveaway instead.
By Matthew Yglesias@[e-mail]
Mar 6, 2018, 2:00pm EST


A fierce debate is taking place in Democratic Party financial regulation circles over whether the Senate bill to relax Obama-era bank regulations is a disastrous giveaway to industry or really more like a small and unimportant giveaway to the industry.

The voices of complacency are, I think, neglecting exactly how much mischief can be created by some of the provisions here — most egregiously, though not exclusively, a little verbal change from saying that the Federal Reserve “may” tailor regulations to individual banks’ individual circumstances to saying that it “shall” do so.

But the most egregious thing about the bill isn’t even the specifics of its content; it’s how one-sided — and unnecessarily so — it is.

Consider:

Right now the Consumer Financial Protection Bureau lacks a Senate-confirmed director and is instead being overseen by White House budget chief Mick Mulvaney, who is on a mission to destroy the agency.
Right now the Federal Reserve Board of Governors contains one Democrat, two Republicans, and four unfilled vacancies.
Right now there is no undersecretary of Treasury for domestic finance.
Right now two of the five seats on the Commodities Futures Trading Commission are vacant.

This and related matters across the executive branch are not things that the Senate Democratic minority has the power to fix. But the Senate Democratic minority does have the power to block passage of a bank deregulation bill. Not only does the GOP need nine or 10 Democratic votes to break a filibuster, but there is simply no urgency to this legislation. It’s a big priority for bank lobbyists and for Mitch McConnell, but unlike with a high-stakes government shutdown, nothing happens if you delay it for another day or week.

And at the end of the day, one thing the voices of complacency do get right is that this bill leaves the broad Dodd-Frank framework in place. But that’s a framework that places a great deal of emphasis on the leaders of America’s financial regulatory agencies making a good-faith effort to oversee the industry adequately. I have zero confidence that the Trump administration is committed to that concept, and its treatment of the CFPB shows that nobody should.

The good news is that while the president controls the appointments, most of these agencies have a very large degree of operational independence from the White House. If the jobs — especially at the Fed and the CFPB — are filled with good people, that’s a really big deal. If they’re filled with bad people or left vacant, that’s also a really big deal.

And though it’s very hard for Democrats to influence this sort of thing while the GOP holds a monopoly on power in Washington, the bank bill would be a golden opportunity to exert some influence. But they haven’t done it. The dozen moderates voting for the legislation aren’t striking a deal with the GOP to get something done. They’re giving away the store.

And while it’s nice that the party leadership is formally opposed to the legislation, it’s clear enough that you wouldn’t see defections on this scale — including critical ones from senators representing blue states — if leaders really wanted to block it. It’s an abdication of responsibility, and it’s appalling.

[ananda]

1. Sigh. This is So depressing.

nt

[dlk]

2. It's the Obscene Amounts of Money and It Has Thoroughly Corrupted our Entire Political Process

We are no longer a democracy because of it.

[PaulX2]

15. Yep - Government By Auction

Simply speaking.

[spanone]

3. sickening.

[BSdetect]

4. These people are pure scum.

[Ninga]

5. I posted an OP about this a few days ago. it is a big symptom of the dismantlement of our

democracy and why we are headed to uncharted ground.

[alarimer]

6. I'm not sure what they thin they are getting.

I am angry that any Democrat signs on to any Republican legislation at this point.

This has not gotten a lot of attention because people are not as concerned about this personally as, say, taxes or health care. But this may be an economic disaster down the line.

[CentralMass]

7. Here are the 17 Democrats .

Bennet (D-CO)
Carper (D-DE)
Coons (D-DE)
Donnelly (D-IN)
Hassan (D-NH)
Heitkamp (D-ND) Jones (D-AL)
Kaine (D-VA)
King (I-ME)
Manchin (D-WV)
McCaskill (D-MO)
Nelson (D-FL) Peters (D-MI)
Shaheen (D-NH)
Stabenow (D-MI)
Tester (D-MT)
Warner (D-VA)

[kentuck]

8. All far leftists!

Not.

[KPN]

23. Are these folks really democrats?

[Glamrock]

27. Well the do have (D) 's after their names.

And really, that's the most important thing.

[KPN]

28. Oh yeah, I keep forgetting that part. What I really need to forget

is that one-step forward, two-steps back feeling I've had over the past 40 years on economic/labor issues.

[Glamrock]

30. Yep

[appalachiablue]

37. 'Right Wing Democrats' is accurate, and disappointing.

[KPN]

48. Yes it is but I prefer the term republicrats.

[Ilsa]

26. Some of them are the usual suspects.

Heitkamp, Tester, Stabenow, Manchin, McCaskill, etc. We have to remind them that they say they are democrats.

Kaine's name surprises me a little. I don't know about the rest. I just don't know them.

I hope E. Warren can change their minds.

[n2doc]

9. Well, when it all comes crashing down again we will know whom to blame

But of course, people will chose from that list depending of their political affiliation, just like last time.

[octoberlib]

10. Democrats are in a good bargaining position but they're just giving away the store.

This bill goes far beyond the health of community banks and credit unions. It removes protections for 25 of the top 38 banks; weakens regulations on the biggest players and encourages them to manipulate regulations for their benefit; and saps consumer protections.What do Democrats get in return? Nothing substantive that they should want. They could demand better funding for regulators or an appointment to the Consumer Financial Protection Bureau — or a vote on gun control.

The Crapo bill will introduce a one-word change from “may” to “shall” that will pave the way for the biggest, most politically connected financial firms to argue that regulations should be tailored to be weaker for themselves, creating a race-to-the-bottom dynamic in what has been, so far, fair rules written for all banks to follow together. It allows community banks to violate the Volcker Rule, introduced in Dodd-Frank to prevent banks from engaging in hedge-fund-like gambling with their own funds.

This bill also hurts consumers. It removes protections on mobile homes and appraisal requirements in rural areas, while getting rid of the requirement that smaller banks prove that borrowers can repay subprime loans they make and keep on their own books. All of these read as if they were written to appease a specific lobbying group, rather than out of a concern for consumer security.

The most serious consumer protection rollback involves banks reporting on the mortgages they offer. The Crapo bill will exempt banks that make fewer than 500 mortgages — which includes nearly 85 percent of banks — from reporting important mortgage data. This data is used to ensure that discriminatory or other abusive practices aren’t happening. This exposes minority communities and rural areas, voters Democrats need to win over to gain viability, to increased predation.

https://mobile.nytimes.com/2018/03/06/opinion/democrats-trump-dodd-frank.html?rref=collection%2Fsectioncollection%2Fopinion&action=click&contentCollection=opinion&region=stream&module=stream_unit&version=latest&contentPlacement=3&pgtype=sectionfront

[KPN]

31. Yup, one step forward two-steps back.

Makes me wonder, do they think we are idiots?

[jalan48]

11. And Kaine was our VP pick in the last election.

[Duppers]

12. And is my senator whom I wrote to re this bill!

[xxqqqzme]

25. Uninspired choice

n/t

[Ferrets are Cool]

13. This is more maddening than when the repugs do it....

we expect it from repugs...it feels like abandonment when our own does it.

[shanny]

14. Same as it ever was.

THIS is why we need disputed primaries, not rubber-stamp protect-the-incumbents-at-all-costs. One of my Senators is on that list: Bennet, appointed to a vacated seat (incumbent went to Obama's cabinet), banking background (surprise!), hasn't had a challenge since. Our democracy at work

[KPN]

22. Yes, absolutely so long as their are strong,

undamaged challengers. And hopefully there are. This issue alone could unseat the purchased.

[NRaleighLiberal]

16. Dems may have the smarts and ideas, but not always the spine....and there is the $$$$$ thing

Yes there is right and left, liberal and conservative, democratic and repub

But there is also have and have not.

In general, like the media, politicians are (or think they are) in a protected bubble.

[Fiendish Thingy]

19. They seem to find the spine to stand up to their constituents

Their donors, not so much...

[KPN]

21. +1!

Touché!

[OnlinePoker]

17. Einstein's attributed insanity quote comes to mind.

I can't believe this shit keeps happening over and over again.

[Fiendish Thingy]

18. Primary them all!

Or would that be insisting on "purity tests"?

Do you think these 17 would vote for impeachment of Dems take the majority?

[NurseJackie]

33. Lord.

[BannonsLiver]

46. You could drop this entire thread into JPR and it would fit perfectly

[NurseJackie]

47. I know... weird, huh?

[KPN]

20. Well, doncha know that these particular

17 Senators represent States where the voters are deeply concerned about the health and welfare of banks and Wall Street. This is a major, priority concern of their constituencies. To Do otherwise would result in nothing more than ceding their offices to Rs next time they are up for election.

[vi5]

24. Exactly...

...I already think the "the will of their constituents" bunk for red state Dems is complete BS at least 60% of the time. But this takes that BS to new heights.

[zipplewrath]

39. Well, apart from the sarcasm

I get the basic thrust of the OP, because it's true, they seem to be signing on, without getting anything for their support.

Of course, what that means is getting anything FOR THEIR CONSTITUENTS per say. They are probably getting contributions from the industry, and some "protection" come election time.

That said, this bill is moving forward without alot of resistance because of what it claims to do. The collapse occurred because alot of large international banking institutions were involved in hugely risky investment vehicles. There were also huge national mortgage entities that were issuing bad paper, and then getting the rating agencies to give them safe ratings.

This bill is intended to relieve many of the smaller regional and state level banks from much of this since they weren't part of the problem to begin with. They are claiming, and their senators are representing that this is unfairly hurting them and causing the states to lose that state and local focused loans that support local growth, in favor of large national banks that are more interested in larger deals in out of state locations.

Which all sounds really good, but I'm not sure you can really make that case. Small banks struggle for a variety of reasons, most of them having nothing to do with regulation. My credit union just merged with a much larger one, not because of regulations, but because at their size, they had a hard time serving their highly distributed customer base. Regional banks often don't generate enough capital to support large regional projects, and those projects have to go seeking the larger institutions. They are often also ripe targets for mergers. When you are a large bank wanting to become a big player in New York, the quickest way is to buy up alot of small banks. None of this has to do with regulation.

And the risk isn't so much that these institutions won't be well regulated, it is that they get labeled as being easier to regulate, and so become attractive targets for others to get control and leverage into much larger deals, before anyone notices and begins to regulate them at the level they deserve. The get involved in "cooperative" deals that don't seem as large, until you see that these deals, in the conglomerate, and very big indeed. This was a big problem in the Savings and Loan Crisis way back when. Folks bought up small ones and created an interconnected set of institutions that no one noticed were all tied together, until it was too late.

[KPN]

41. Thx for the info/analysis. So what's the

solution? If we give up big stuff to gain small stuff that may not actually be gains anyway, what has been achieved? Where's the legitimate rationale for doing it in the first place?

BTW zipplewrath, you should post this as a direct response to the OP too. Good stuff -- deserves visibility it may not get in a response to a response.

Thx again.

[zipplewrath]

42. We're in the minority

If one expects things to move forward when in the minority, one only gets the "small" stuff. You can either block, or participate. In the short term this appears to be a small risk. The riskier elements of this will not play out for a few years. If we get in the majority, even if just in the executive branch, we can handle much of the risk through regulation. It is always true that regardless of what legislation one passes, the regulators control everything.

Quite honestly, this bill could have easily made it through a democratically controlled senate as well. It might not have been as "bad" but their is a tendency to pass this kind of stuff when "we" are in control and feel we can control the risks. Ya get 30 democratic senators and 20 GOP and the thing passes. It's why the liberals get so pissed because the conservative side of the party knows how to leverage the GOP to get stuff passed that the party generally doesn't support. When the GOP is in charge, it gets even easier.

This kind of bill is why the left was so unhappy with Dodd-Frank to begin with, because it didn't address the underlying issue. Once you become "too big to fail" it doesn't matter what regulations to which you are exposed. You're still the problem. Dodd-Frank tried to say what regulations would prevent you from "failing". The left wanted to say, "we can't be prevented from letting you fail". The risk here is that they want to declare a group of banks up front that they are "too small to be a problem". They may be so today....

[KPN]

43. The flaw in all of this that we are never in power

long enough because we lose voters over time. The millennials are not apathetic, they are disenchanted and refuse to play the game when the result appear always to be the same: platitudes but not results. It seems to me what's at risk is the Democratic Party.

[democratisphere]

29. America has become one of the most corrupt nations in the world.

It is a disgrace.

[elmac]

32. The amount od Dems who voted for the disastrous 2005 bankruptcy bill

with the help of Senator Biden pretty much showed me that we have a very big problem with banksters controlling our party. Sen. Elizabeth Warren was very much against the bill which makes it pretty much impossible for individuals to fully discharge debt but corporations can walk away, no prob.

[JCanete]

34. ...but these Sentaors vote with us 95, 90, 85, percent of the time...and we need them

to continue to muddy our party's name and to tie, or appear to tie(hell these are the people our leaders keep putting their weight behind), our leadership's hands? Primaries are bad people...cuz if we lose a seat or two we might get some really bad legislation passed...wouldn't want that over the death by a 1000 paper cuts.

[Fix The Stupid]

35. "Bashing" & "attacking" Democrats? Why is this allowed to stand?

Paints Dems in a bad light...this needs to be alerted on and removed so our beautiful minds can continue on with the status quo.

[babylonsister]

36. "Paints Dems in a bad light"...if the shoe fits... nt

[StevieM]

38. This is the kind of bill that the left-wing blogosphere (TYT, etc.) pretended HRC would have backed.

In reality, she would not have been one of the 17. She would have voted no. And she would have vetoed it if she was in the White House.

[zipplewrath]

40. You think so?

I don't know how to read this one. This has "protect red state senators" written all over it, which is something that Obama would have understood. As someone pointed out, Schumer isn't doing much to stop this. I suspect she would have been vastly better at the optics. Maybe bringing on board Warren to put some "cookie" in the thing to which everyone could have pointed.

I do wonder if Schumer sees this as a potential campaign issue for other senators that is worth the risk it creates.

[Blue_Tires]

44. It's mostly bad because it gives to leftbro crowd the excuse to:

1. Ignore Trump scandals for the next two weeks (not that they were paying attention anyway, but now they really have a reason to not look in Trump's direction).

2. Pile on Hillary (their favorite pastime) for having the nerve to select Kaine, and so called "Establisment" Dems in general.

3. Tear the scab off the 2016 primaries (their second-favorite pastime)...

Greenwald, Bragman and Taibbi are practically orgasmic right now...

[babylonsister]

45. What?

So these Democrats are not at all culpable and we should just ignore this?

And I don't know of anyone here ignoring all the dt scandals.