Everyone knows that the lobbyists for the financial giants are trying to kill any tough new regulations.
But they are also trying to weaken existing regulations.
Specifically, Robert Borosage notes:
The [derivatives] bill that the House will consider on Wednesday creates a clearinghouse, not a publicly managed exchange. It also allows banks to decide that a deal is so unique that it needn't be posted on the clearinghouse. The best experts in the field -- like Michael Greenberger of the University of Maryland -- warn that the legislation might end up WEAKENING current law. That is no small achievement, because, as we saw in the collapse of AIG, current law is toothless...
As I have previously noted, Satyajit Das - a leading derivatives expert - also says that the new credit default swap regulations not only won't help to stabilize the economy, they might actually help to destabilize it.
The banking lobby is nothing if not shameless. They hope to use the reforms to WEAKEN current law. They are pushing to make the federal standard the ceiling on reform, stripping the power of states to have higher standards. Basically, they are hoping to find a way to shut down the independent investigations of state attorneys general like New York's Eliot Spitzer and Andrew Cuomo or Illinois' Lisa Madigan. (for a good summary of this see Dave Johnson's blog here)
And Ryan Grim writes:
Illinois Attorney General Lisa Madigan pushed back against her fellow Democrat, Rep. Melissa Bean (D-Ill.), on Wednesday, sending a letter (PDF) opposing her effort to block states from having the ability to write bank regulations that are tougher than those imposed by a federal Consumer Financial Protection Agency...Oped Readers: Please see my series of investigative pieces here, here and here so you know what the lobbyists are doing right now ... and the pressure we have to put on Congress to stand up against all of the cash.
On Wednesday, the committee took up a proposal to create a Consumer Financial Protection Agency. As currently structured, it would set baseline requirements, but states would be able to toughen their own regulations. An amendment by Bean would prevent states from doing so and a vote could come as early as Thursday...- Advertisement -
Bean is the co-chair of the pro-business New Democrat Coalition's financial services task forced and vies for the title of Wall Street's favorite Democrat. Bean and other New Dems are tussling with committee progressives over federal preemption. If Bean's measure carries, states would not be allowed to enforce consumer protection laws on national banks that are stronger than those at the federal level. All banks would need to do, then, is water down regulation at the top, rather than in each state legislature...
Only in her third congressional term, Bean has already taken more than two million dollars from the finance, insurance and real estate industries...