Senator Dodd’s Dilemma: Who to Take to the Ball?
On Friday, the Wall Street Journal reported that President Obama's signature financial reform, a Consumer Financial Protection Agency (CFPA), was in trouble in the Senate.
Senate Banking Chairman Chris Dodd (D-Conn.) was considering dropping the idea of creating an independent, stand-alone consumer protection body, empowered to crack down on banking abuses, in order to get a regulatory revamp passed this year with bipartisan support. Dodd is apparently considering shrinking the CFPA into a division of an already existing federal agency (no doubt one with a proven track-record of failing consumers.)
On January 6th, facing an impossibly tough re-election fight, Dodd announced that he was stepping down at the end of 2010. Analysis was mixed about what this would mean for bank reform, but Politico reported that one financial service lobbyist crowed: "Now that Dodd is retiring, he can ignore the demands of the special interests on the left (consumer groups, trial bar, unions) and dance with the special interests that brought him to the dance in the first place. Us, his loyal donors in the banking community."
Today, BanksterUSA released its new video, which calls upon Senator Dodd to dance with the people and not the special interests. The video features Harvard Law Professor Elizabeth Warren, who came up with the idea of a Consumer Financial Protection Agency. Warren makes the simple argument, that if America has an independent regulatory body to police toasters so they cannot burn down your house, why don't we have an independent regulator to police deceptive mortgages that can put you out on the street?
The video also features Jamie Dimon of JPMorgan Chase, the largest bank in America based on market capitalization. The focus on Dimon is particularly timely. Dimon's firm survived the great meltdown, absorbed the failing WaMu and Bear Sterns, received billions in bailout funds and other government benefits which allowed the firm to prosper in 2009. Dimon has been lobbying hard against any size cap on big banks and he has been touted as a replacement for U.S. Treasury Secretary Timothy Geithner who has come under fire for his mishandling of the AIG bailout while head of the New York Fed.
On Friday, JPMorgan Chase announced $11 billion in earnings for 2009, and an eye-popping $27 billion in bonuses. The New York Times dryly reported that the bonus numbers "underscored the gaping divide between the financial industry and the many ordinary Americans who are still waiting for an economic recovery.
Senator Dodd is considering having his first hearings on financial reform at the end of January. Now is the time to "Fill Dodd's Dance Card" by signing our petition to send Dodd the message that the American people expect him to make protecting Main Street his legacy, not dancing with Wall Street. Dodd's committee must pass meaningful reform, even if that means kicking big bankers like Jamie Dimon out of the ballroom and telling Senate Republicans "no deal" on a weak package of reforms.
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New Sheriff?
Yea, that's what we really desperately need; a new federal agency to "advocate" for consumers. We already have a "new" federal agency, The Federal Housing Finance Agency with the following mission: Mission Statement:Provide effective supervision, regulation and housing mission oversight of Fannie Mae, Freddie Mac and the Federal Home Loan Banks to promote their safety and soundness, support housing finance and affordable housing, and support a stable and liquid mortgage market. Would this new Sheriff be able to over rule Barney Frank if he tried to obstruct actual reform of Fannie and Freddie? Here's a quote from the NYT, Sept 11 2003 "These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." As the ranking Democrat on the Financial Services Committee Mr. Frank had the power to dramatically reduce the risks of a subprime mortgage disaster if he hadn't stood in the way of actual reform attempts. Instead he's on record saying he was willing to "roll the dice" with Fannie and Freddie. Mr. Frank is a thief and a traitor to our nation of hardworking taxpayers who are now faced with the reality of paying for his gamble. Jeff Harris