Here she goes again: Wall Street's favorite Democrat, Rep. Melissa Bean, D-Ill., is once again shilling for the banks.
As I wrote back in October, Bean misrepresented the views of financial watchdog Elizabeth Warren in arguing that states should not be able to set tough laws against the banking industry.
Now Bean is offering an amendment to the bill that would authorize the creation of a Consumer Financial Protection Agency and institute other key reforms that would weaken the ability of states to regulate banks. Lauren Sanders, managing attorney, National Consumer Law Center, explains to me in an email:
The amendment gives the [Office of the Comptroller of the Currency] and [the Office of Thrift Supervision] expansive new powers to preempt state consumer protection laws, far beyond what they currently have. The amendment also makes every CFPA rule and every federal consumer protection statute that the CFPA will administer a ceiling as to banks, even in many areas of state law that are not currently preempted, including Equal Credit Opportunity Act; Fair Debt Collection Practices Act; Fair Credit Reporting Act, Real Estate Settlement Procedures Act, and Graham Leach Bliley Act's financial privacy rules
In layman's terms, Bean's amendment guts the current regulatory framework in which states play the role of the local cops on the beat. It's like moving all of the country's fire departments to Washington. We need regulators out on the front line who can respond quickly to problems before someone's house is burned down by a liar's loan or an entire economy is burned by risky investments.
As Melissa Bean's own attorney general Lisa Madigan of Illinois has argued, not allowing states to impose tough regulations on the banks was one of the reasons for the financial crisis:
Federal laws have frequently stymied state reform efforts. These laws preempted states from regulating certain risky loan terms and features. It was precisely these types of features that led to widespread abuses in the mortgage lending market. State attorney generals saw the abuses of prepayment penalties, which often locked burrowers into unaffordable sub-prime mortgages. Yet federal preemption barred the states from enacting tougher laws to address these abuses, even as applied to those entities we regulate.
We need states to be cops on the beat watching the banks. So why in the world is Bean trying to disarm the police so necessary for protecting Main Street from Wall Street?
It's because the three-term Illinois congresswoman and leader in the New Democrat Coalition has pocketed almost $2.2 million since she's been in Congress from the banking and financial services interests she oversees as a member of the House Financial Services Committee, according to the Center for Responsive Politics, including $338,125 so far this year.
Wall Street Democrats like Bean are currently flooding the House floor with amendments favorable to Wall Street to the House financial reform bill.
We shouldn't stand for Democrats doing the work of Wall Street when they are supposed to be doing the work of the American people. We need to get our cops back on the beat protecting Main Street from Wall Street.