Tag Archives: Financial Regulatory Reform Legislation

Obama, Democrats Score Another Victory with Passage of Financial Reform Bill

President Obama and the Democrats in Congress (with the help of a few Republicans) passed another piece of major legislation. Give credit where credit is due. Despite the never ending negativity of the Republican leadership, Democrats prevailed in passing a major bill to reform financial practices in America. The legislation is a significant reversal from past  policy decisions pushed by free market Republicans to deregulate the financial industry. These policies failed as demonstrated by our current depressed economy and loss of jobs.
 By a Senate vote of 60 to 39, Democrats overcame a continuing filibuster threat by the Republican leadership intent on trying to stop Congress from passing any reform legislation and then blaming Obama for not getting anything done. Voters this November need to keep in mind that it is the Democrats who are working to clear up the messes left by the last Republican Administration and that Republicans continue to obstruct needed change.

As the New York Times notes:

The vote was the culmination of nearly two years of fierce lobbying and intense debate over the appropriate response to the financial excesses that dragged the nation into the worst recession since the Great Depression.

The result is a catalog of repairs and additions to the rusted infrastructure of a regulatory system that has failed to keep up with the expanding scope and complexity of modern finance.

The bill subjects more financial companies to federal oversight, regulates many derivatives contracts, and creates a panel to detect risks to the financial system along with a consumer protection regulator.

A more detailed analysis of some of the provisions of the legislation and comments by some NW Senators can be found on the NPI Advocate.

There’s a great column in today’s Seattle Times by Froma Harrop entitled “Don’t forget who created this mess”. I highly recommend people read it. (Unfortunately the column is not on the Seattle Times website yet).
Too much attention has been given to vocal strident anti-government protesters on the right. They are aligned with and being promoted by conservative Republicans who want back in power. As Harrop says:

But when they ask whether I want Republicans to take back Washington, I’ll respond: “Are you out of your mind? We’re still recovering from their last round of debauchery – their fiscal irresponsibility, servility toward wall Street, disrespect for science, contempt for the environment”. …
Dear readers, I’m a reasonable woman. I don’t care much about ideology.  My bottom line is what’s good for the country.  While the country is on a bad path, Republican voodoo is what put us on it.  Surely, many voters agree with me.

Only 3 Senate Republicans to put Financial Reform before Politics

Most US Senate Republicans are more intent on playing partisan politics than they are on doing their job and looking out for how to protect the American public from shady financial interests.  Too many in the financial community were more intent on making a fast buck than on providing the public with fair consumer practices and honest deals. Lack of adequate consumer safeguards contributed to our near financial disaster.

We are still trying to recover. Most Republicans under their current leadership are more concerned about how to make President Obama look bad than they are on solving our financial problems. They are more intent on playing political games that they think will help them get back into power.

So when 3 Republicans show courage in bucking the do nothing approach of the Republican leadership, they are to be commended.  So far Senators Scott Brown of Massachusetts and Maine Senators Susan Collins and Olympia Snowe have said they will vote to prevent a filibuster from stopping passage of the proposed financial reform package.

Despite the New York Times characterization of the bill as “limping toward Senate passage“, I think garnering 60 votes in the US Senate is significant. My arithmetic saying that 60 votes is a hell of a lot more than 51 votes which would be a simple majority of  the US Senate.  The whole filibuster process stinks and its one of the factors contributing to the public low opinion of Congress. It’s time to end the filibuster.

As the New York Times notes this bill will accomplish a fair amount:

The legislation would create a system risk council comprising the most senior government regulators to try to identify potential dangers in the financial system. It would create a powerful consumer financial protection bureau to be housed in the Federal Reserve and would impose a new regulatory framework on the trading of derivatives, the complex instruments that were at the center of the 2008 downturn.

The bill seeks to avert future crises by giving government regulators the power to seize control of failing financial institutions, break them apart, sell off the assets and put them out of business, with shareholders and creditors taking losses.

The bill would also strengthen the Securities and Exchange Commission by giving it new authority over credit rating agencies , hedge funds and private equity companies.

Senator Cantwell Fights to Strengthen Financial Regulatory Reform Bill

Washington State Democratic Senator Maria Cantwell joined with Wisconsin Senator Russ Feingold to oppose ending debate on the Senate’s sweeping financial reform bill.  As reported in the New York Times, they were the only two Democrats to oppose further debate and were joined by 39 Republicans. Two Republicans, Maine’s Senators Snowe and Collins voted to end debate.

Senator Cantwell strongly supports the legislation but believes it needs to be strengthened.  As the New York Times notes:

Ms. Cantwell, in a floor speech after the vote, said she was mainly fighting for a vote on an amendment to tighten proposed rules for the trading of derivatives, the complex instruments that were at the center of the economic crisis.

Her proposal would make it illegal to enter into a derivatives contract that had not been cleared through an exchange, other than contracts specifically exempt from the law. It would also empower regulators and investors to stop or undo a derivatives deal if banks knowingly violated the trading requirements. …

“If you don’t have a regime of exchange trading and clearing you will have money seeping into the continuation of a dark market,” she added.

Ms. Cantwell said she would also like a vote on another amendment she proposed, with Senator John McCain, Republican of Arizona, that would restore the Glass-Steagall Act, which maintained a firewall between commercial banking and investment banking from the 1930s until it was repealed by Congress in 1999. In a statement, Mr. Feingold said he favored restoring that firewall.

Republican opposition to financial reform was obvious by the subsequent action of Senate Republicans. Senator Reid blamed the Republicans, not Senator Cantwell or Feingold, for stalling the legislation.
Senator Dodd agreed and to show the opposition of the Republicans, he returned to the Senate floor and asked for unanimous consent to vote on the proposed amendment of Senator Cantwell. The motion was defeated when Republican Senator Shelby of Alabama objected.

Republicans continue their strategy of opposing Democratic action on legislation, believing this contributes to the Republicans chances of gaining seats in Congress.  They hope that the public does not see that the Republican stalling tactics are the primary reason Congress is not addressing our Nation’s problems in a timely fashion. Sooner or later the public is going to see beyond the Republican noise machine and Democrats will prevail.

Senator Cantwell is to be commended for her efforts to strengthen this legislation. She is acting in the public interest and showing leadership. Her amendments are reasonable and vital ones to address serious problems in the financial markets. Washington State can be proud of Senator Cantwell’s leadership on this issue.