The GOP gift to the banksters of Wall Street

Posted by AzBlueMeanie:

Monopolyb When Republicans stymied the omnibus spending bill and forced a continuing resolution under the 2010 budget, they ensured there would not be new funding for financial regulatory agencies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which includes the new Consumer Financial Protection Bureau headed by Elizabeth Warren. This was an early Christmas gift from the GOP to the banksters of Wall Street.

Republicans plan to repay the campaign largess they received from Wall Street and its allies as a result of Citizens United v. FEC in the new Congress by attempting to repeal this modest financial regulatory reform, even as the nation continues to suffer the ill effects of the worst recession since the Great Depression brought on by the reckless speculation of casino capitalism on Wall Street. Republicans want a return to business as usual: the banksters of Wall Street should be permitted to rob Americans blind and to jeopardize our financial system and economy unimpeded. This is recklessly irresponsible. As GOP takes House reins, Republicans to reexamine financial regulatory overhaul:

As the GOP prepares to seize control of the House in January, its members on the Financial Services Committee are vowing to reexamine the wide-ranging financial regualtory legislation passed earlier this year.

Among other things, the overhaul hammered out in the wake of the financial crisis establishes the new Consumer Financial Protection Bureau, creates oversight of the vast derivatives market and gives the government broad new authority to seize and wind down large, troubled financial firms.

"We're looking at it provision by provision," Rep. Spencer Bachus (R-Ala.), the incoming committee chairman, said in an interview.

[This is the guy who said “In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks.” Incoming GOP Financial Services Chairman: Washington’s Role Is ‘To Serve The Banks’]

In particular, Bachus said Republicans want to revisit provisions that would require companies that use derivatives merely to hedge risks – such as an airline guarding against swings in fuel prices – to set aside more capital for those deals. Bachus said such "end users" did not contribute to the financial crisis and should not face the same restrictions as Wall Street firms that deal in more-risky forms of derivatives.

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Bachus also has remained adamant that lawmakers take a second look at the new "resolution authority" granted by the bill, intended to allow the Federal Deposit Insurance Corp. to take over and liquidate a large, failing firm in a way that doesn't leave taxpayers on the hook or cause widespread damage to the financial system. GOP members have insisted that the law, as written, could perpetuate government bailouts because it allows federal officials to pay off a company's creditors and assume a portion of its assets.

Despite the eagerness within the GOP to roll back or repeal portions of the financial regulatory overhaul, Frank and his Democratic colleagues seem largely unconcerned that significant changes will become reality.

"They can't do anything legislatively. For one thing, the things they most dislike legislatively are some of the most popular things we've done," said Frank, referring specifically to the new consumer bureau, the derivatives legislation and the Volcker Rule, which limits banks from trading on their own accounts. "I can't imagine many of their people want to vote on those."

Even if any changes were to pass the House, Democrats still control a Senate that is as divided as ever.

[And the president wields a veto pen, should he ever threaten to actually use it.]

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While almost everyone agrees that the chances of repealing parts of the Dodd-Frank law are slim, that's not the only method GOP members can use to slow new regulations they don't like. They can call hearings on various topics and haul regulators to the Hill to explain how they plan to implement certain rules.

In addition, said Robert Litan, vice president for research and policy at the Kauffman Foundation in Kansas City, Mo., and a senior fellow at the Brookings Institution, Republicans can use the appropriations process to crimp funding to agencies such as the Securities and Exchange Commission and the Commodity Futures Trading Commission, which are responsible for putting many new regulations in place.

"They can slow down through the money channel what they couldn't do through the legislative channel," Litan said. "The Financial Services Committee can't do that; only the appropriators can. But there's no reason why they wouldn't work together."

Something Republicans already did this week by forcing the continuing resolution.

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