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.

Comments

[anonymous67]

07:25 PM on 07/18/2011

Yes, Timmy. And just who gave these banks "the vast sums" that they are using to corrupt our government?

Why Timmy -- it was YOU!

[Bill Roth]

08:31 PM on 07/04/2011

Our elected officials failed us in a time when we needed them most. A simple one to two page law would have been best. The 2300 page Dodd-Frank bill is a joke. Failure would have been a good lesson to most. Scratch that. When you make the rules you never fail. Sorry, HOR and Senate. Didn't mean to blow you cover. Thanks for you hard work. Keep the presses running. How long does it take to print a trillion dollars? I know with the swipe of a pen you can make 10's of trillions. Keep feeding the FED. Thanks for your helpful insight to this Great Recession. Peace and God bless America!

[garl26]

09:30 PM on 06/29/2011

I can see why Wall Street doesn't like this bill, but it needs to include regulating derivitives .

DODD-FRANK BILL enacted December 2, 2009,

1.identify the risks to the financial stability of the United States from both financial and non-financial organizations
2. promote market discipline, by eliminating expectations that the Government will shield them from losses in the event of failure
3. respond to emerging threats to the stability of the US financial system
4.enhance the integrity, efficiency, competitiveness, and stability of United States financial markets
5.promote market discipline
6. maintain investor confidence

[msjimmied]

05:00 AM on 06/27/2011

The darn bill was barely a band aid, Dodd did his thing, quit, and joined the banking industry, thank you all very much. Good thing they got "Erode" in quotes...Come on Timmay, make it entertaining, wear the kimono if you're gonna do Kabuki.

[stewartm0205]

01:11 AM on 06/27/2011

The next time the FED needs to step in and provide loans to small community banks, credit unions and corporations directly. The FED and the government must let the banks and financial companies burn. They need to set this up before hand so that the banks know that they will be left to die no matter how big they are.

[nothingchanges]

09:16 PM on 06/26/2011

Much like the Republicans complaining about the deficit AFTER they got their extensions of the Bush tax cuts for the rich. (They get the biggest benefit from them)

Mr. Geithner complains publicly about the sums of money Big Finance has spent..........

AFTER the politicians got their take (on both sides of the isle).

Sounds a lot like hypocrisy to me.

[mgrant33301]

09:11 AM on 06/26/2011

big surprise?
they don't want their gravy train to leave the station till they have looted the treasury.

[liltrix]

12:54 AM on 06/26/2011

From reading these posts on here I'd say if we have one more economic meltdown, the crap is going to hit the fan and both parties are going to be in huge trouble along with Wall STreet and the Banks. The people are fed up and neither party has done anything to alleviate the pain of those who lost their jobs due to no fault of their own and due to the greed and corruption of Wall Street and the banking system.

[GlowingGoingGone]

08:00 AM on 06/26/2011

I agree. I sincerely hope the American people will wake up & protest the tendency to be 'divided & conquered.' This often seems to result in 'cutting off our collective noses to spite our collective faces.'

Long story short. These (precariously United) States of America need to reform our financial systems to address the inherent (& continuing) systemic risks (in particular, the FIRE sector). Legislation solely benefiting big banks is not sufficient.

Rep. Frank said re:, "Appropriations is the only area where the Republicans have strength," & "The President can't force [House Republicans] to vote more money - you can stop bad things with a veto but you can't use the veto to force good things." This is, sometimes unfortunately, rather true in a Representative Republic. The American people have veto power too. Our veto power sometimes works the same way.

If a Representative Republic is to survive, & not become a travesty, the elected Representatives should be obliged to explain (at the very least) one question to their constituents.

Cui bono?

[themodernleader]

12:44 PM on 06/25/2011

Reform. Whatreform? When a large bank again must be bailed out, Geithner can say, "I told you so." True, and also true is what he has said out of public view to protect corrupt finance.

[Matt12]

12:03 PM on 06/25/2011

How many homes does he own now?

[Levittown]

01:13 AM on 06/25/2011

Sen.McConnell loves corruption. He favors no oversight or tranparency of banks and congressmen. Let the rich and powerful ( too big to fail ) get all the gravy and not concern themselves with the American worker or members of the armed forces. They are greedy and like McConnell don't care about patriotism. He will do anything to undo the Obama administration and put up roadblocks that would help employment and the unemployed.

[lvdragonlady]

12:21 AM on 06/25/2011

Well, sit took people long enough to figure this one out. EVERY time regulations are put into place, here come THE LOBBYISTS and the money behind them, twisting arms and buying changes.
Until America STOPS lobbying and lobbyists this will continue to happen.

[kenhamlett]

10:26 PM on 06/24/2011

The legislation was written in a way that made it eminently easy for them to erode. Now, I wonder which cabinet member would have been on watch during that process?

[Ronald Mc Donald]

08:33 PM on 06/24/2011

Henry Paulson, Tim Geitner, The previous president and CEO of AIG and the Previous CEO of Goldman Sacs belong in front of a firing squad, They were able to put a so called Democracy into Bankruptcy. They are guilty of High Treason and should be punished!!

[Michael Kenney]

12:34 AM on 08/21/2011

It is shameful that so few have been prosecuted for the crimes that led to the collapse. I see this as the result of two factors- first, the Bush administration (and Republican politicians) failed to regulate the industry, so that prosecution of financial industry criminals would not happen while he was in office. Second, when Obama came into office the economy was so vulnerable that prosecuting the crimes was a low priority, and the corporations had taken us all hostage. Too big to fail also means to big to prosecute. It is a shame these prosecutions never happened because such actions would have reassured Americans that accountability was real, and it would have taught a lesson to the financial industry (at least for a few years).

[Ronald Mc Donald]

08:27 PM on 06/24/2011

Speaking of criminals!! These bandits make Whitie Bulger look like Cinderella!!