As markup on financial reform legislation continued today in the House Financial Service Committee, a pattern has emerged in which committee members are not forced to go on the record to vote for key amendments that weaken financial reform. Instead, the chairman of the House Financial Services Committee, Rep. Barney Frank, is calling voice votes in which the yea or nays against certain weakening provisions are not recorded.
Two of these weakening amendments have been particularly in the banks' favor. One amendment, the Miller-Moore Amendment to HR 3126, the Consumer Financial Protection Agency bill, exempts 98 percent of banks (8,000 of 8,200), all of which were covered by the President's plan, from the oversight authority of the proposed new CFPA.
Because exempting so many banks from regulation is highly unpopular, members of Congress don't want voters to know that they voted for such ridiculous measures. So Chairman Frank was allowed to merely call for a voice vote. That way, the committee members don't have to answer for where they stand.
The same thing happened last week on a vote on the regulation of derivatives, the exotic financial instruments that Warren Buffett called "weapons of financial mass destruction." A key weakening amendment, passed by voice vote in committee, would ban the Securities and Exchange commission and the Commodities Futures Trading Commission (the regulators in charge of overseeing derivatives) from stopping derivatives that seem abusive or risky to the markets. Not allowing the regulators to stop derivatives that appear abusive is like telling a cop that he can't intervene if he sees what appears to be a crime in process.
In these votes, the banks won, and members dodge retribution from voters.
Meanwhile, the CFPA and other regulators will fall short of meeting the goals that President Obama set for regulating the markets, thus putting Americans at risk of another financial disaster.
As a veteran financial watchdog of the National Community Reinvestment Coalition, John Taylor, states in regard to the CFPA bill:
The bill is unacceptable; it does not reign in the outrageous and abusive practices in the banking industry. Congress is failing to deliver on President Obama's commitment to achieve fundamental reforms of the financial system. The bill's flaws are so glaring that it's impossible not to see the influence of the banking and credit card lobbies. The bill's intentional inadequacies assure that working families will continue to struggle with inappropriate, deceptive, and high cost financial products.
If members of Congress are going to vote in favor of the big banks, they should go on the record; that way the big banks know where to send the checks.
Financial reform is still a top issue of many Americans. The media might not be covering it as much as it did a year ago, but for Americans who have lost their retirement savings, their jobs, and frequently their homes--it's still a huge issue. A poll recently released by the SEIU showed that 74 percent of Americans agree that "the greed and risky decision of banks and financial companies led to the financial crisis and recession and its time that Congress crackdown on their reckless practices to protect consumers."
After more than a year in office, the public is no longer inclined to lay the blame for the financial bailout and its consequences on the Republicans. If Democrats fail to pass meaningful financial reform, the American public will hold Democratic officeholders in general accountable, whether or not they go on the record.