The banksters of Wall Street are back to writing their own laws again

Posted by AzBlueMeanie:

BringBackBankRegulationsThe banksters of Wall Street perpetrated the largest fraud in the history of mankind, nearly melting down our financial system and doing substantial harm to the world's economy that peaked with the economic collapse in 2008, the worst economic catastrophe since the Great Depression.

At the time I called for Congress to establish a new Pecora Commission to investigate the banksters of Wall Street and the causes of the economic collapse. (Historical note: As a result of the Pecora Commission's findings, the United States Congress passed the Glass–Steagall Banking Act of 1933 to separate commercial and investment banking, the Securities Act of 1933 to set penalties for filing false information about stock offerings, and the Securities Exchange Act of 1934, which formed the SEC, to regulate the stock exchanges.)

I also called for a "sheriff of Wall Street," a hard-nosed prosecutor who would pursue the idea that "somebody's going to emergency, somebody's going to jail." This did not happen.

Instead, the banksters of Wall Street were bailed out by the taxpayers to prevent the complete melt down of our financial system due to massive fraud that they themselves had perpetrated. Congress passed the Dodd-Frank Act financial reforms that were the best that could be achieved over an obstructionist GOP (and some conservadem allies in the Senate). The GOP has continued to relentlessly block the administrative rule making process under the Dodd-Frank Act, and continues to block the nomination of Richard Cordray to the newly-created United States Consumer Financial Protection Bureau (CFPB). Blocking the CFPB from having a director prevents it from having administrative rule making authority and investigative powers (the GOP thus continues to filibuster a law that Congress has already enacted to prevent it from taking effect).

The greatest failure of the Obama administration, and Attorney General Eric Holder specifically, in my opinion, is its failure to appoint a "sheriff of Wall Street," a hard-nosed prosecutor who would pursue the idea that "somebody's going to emergency, somebody's going to jail." As the PBS news magazine Frontline reported ealrier this year, not one major Wall Street executive has been prosecuted on fraud charges for the financial crisis. The Untouchables | FRONTLINE | PBS.

Now the same banksters of Wall Street who nearly melted down our financial system and did substantial harm to the world's economy are being given ready access to the Tea-Publican Congress to write their own legislation, which will undermine the weak Dodd-Frank Act financial reforms and return to "business as usual" before the 2008 financial collapse, as if nothing occurred. Is Wall Street literally writing America's laws now? – The Week:

A bill called the Swaps Regulatory Improvement Act recently sailed through the House Financial Services Committee. But when The New York Times went through emails from a lobbyist to the congressmen who wrote it, the paper discovered an unofficial co-author: Citigroup.

It turns out that recommendations from Citigroup made up 70 of the
bill's 85 lines, with two important paragraphs copied almost verbatim

save for two words that were changed to make them plural, according to
the Times.

The bill takes aim at the 2010 Dodd-Frank Act, the financial
regulatory reform bill that was meant to prevent a repetition of the
2008 financial crisis. The specific provision in question forbids banks
from trading certain derivatives that critics say were instrumental in
causing the crisis
. Under Dodd-Frank, those derivatives would have to be
moved to affiliates that weren't FDIC-insured, lessening the chance
they would be the recipients of government bailouts.

Erika Eichelberger at Mother Jones also compared the Citigroup draft of the bill with the final House version and found them "practically identical." She noted that
Citigroup has long played a role in relaxing financial regulations,
including the 1999 repeal of the Glass-Steagall Act, which once
prevented commercial banks from engaging in the same activities as
investment brokerages.

Citigroup was the "bank that administered the coup de grace to
Glass-Steagall,"
Marcus Stanley, policy director at Americans for
Financial Reform, told Mother Jones. (Historical note: In 1933, Ferdinand Pecora's investigation of the National City Bank (now Citibank) made banner headlines and caused the bank's president to resign).

Citigroup defended its lobbying efforts in a blog post
on its website. Ed Skyler, head of global public affairs, wrote that
the provision "does absolutely nothing to create a safer financial
system." Instead, he wrote, it would "create undue costs and burdens on U.S. financial firms," which will force them to "simply do business elsewhere."

* * *

While there has been a notable lack of bipartisanship in Congress in
recent years, it appears that both Democrats and Republicans are more
than open to Wall Street's money. As Sen. Dick Durbin (D-Ill.) once said
of Congress, banks "frankly own the place."

"Democrats can’t be trusted to control Wall Street," Robert Reich, former secretary of labor under President Clinton, said at Salon. "If there were ever an issue ripe for a third party, the Street would be it."

Even those who supported the bill said the close relationship between the banks and lawmakers was unseemly.

"It’s appalling, it’s disgusting, it’s wasteful and it opens the
possibility of conflicts of interest and corruption," Rep. Jim Himes
(D-Conn.), a former Goldman Sachs banker and member of the House
Financial Services Committee who backed the bill, told the Times. "It’s unfortunately the world we live in."

The Swaps Regulatory Improvement Act (H.R. 992) was approved by the House Committee on Financial Services on May 7, 2013, by a bipartisan vote of 53-6. Arizona's Rep. Kirsten Sinema (D-CD 9) sits on the House Committee on Financial Service, and voted in favor of the bill. Her constituents should contact her.

Comments are closed.