Tim Geithner: Banks Have Spent Vast Sums To 'Erode' Financial Reform
Nearly one year after Congress passed financial reform, Timothy Geithner appears to have had enough with anti-Dodd-Frank lobbying efforts.
Treasury Secretary Timothy Geithner said on Wednesday that large American banks are spending "a huge amount of money to erode, weaken, walk back" the Dodd-Frank financial regulations that were enacted last year, according to The Wall Street Journal.
Geithner conceded that there was "some risk that examiners are going to overdo it a bit," but still defended the Dodd-Frank Act during a hearing before the House Small Business Committee, according to the WSJ.
Banks have continued to lobby aggressively against new financial regulations. In fact, the largest-lobbying banks spent 2.7 percent more to lobby Washington during the first quarter of this year than they did last year, when Dodd-Frank was being written, the WSJ reported in April.
Large banks have challenged Dodd-Frank's stricter capital requirements for institutions that are so large that their failure would threaten the entire financial system, according to the WSJ. Global regulators plan to reach an agreement on Saturday on how much capital too-big-to-fail financial institutions should hold, the WSJ reported last week. Jamie Dimon, chairman and chief executive of JPMorgan Chase, has been a particularly outspoken opponent of stricter capital requirements.
Banks also continue to lobby against swipe fees, which funnel a combined $48 billion per year from retailers to banks, The Huffington Post's Zach Carter and Ryan Grim reported in April. The Dodd-Frank Act left credit card fees unscathed in a concession to Wall Street, but still ordered the Federal Reserve to regulate debit card swipe fees.
Meanwhile, Congressional Republicans have continued their push to delay and weaken Dodd-Frank financial regulations -- with U.S. Representative Michele Bachmann even threatening to try to repeal the law altogether, according to Bloomberg News. Senate Minority Leader Mitch McConnell said on Wednesday that he supports cutting the budgets of regulatory agencies.
"The less we fund those agencies, the better America will be," he said, according to The Hill, which borrowed the quote from The Financial Times. "I think anything we can do to slow down, deter or impede their ability to engage in this oppressive overregulation, which is freezing up our economy, would be good for our country."
The Securities and Exchange Commission, the regulatory agency that is vested with enforcing many of the new financial regulations, now has more responsibility because of the Dodd-Frank Act, but it still is underfunded and understaffed, SEC chairwoman Mary L. Schapiro has said, according to The New York Times.