A week ago, the U.S. Senate passed S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act (also known as the “Bank Lobbyist Act” or “Crapo Bill”) with a 67-31 vote. The official name of this bill is Orwellian for it will have an effect that is the opposite of what it promises. Also, the vote came 10 years to the day that Bear Stearns collapsed.
As this bill was being debated in the Senate, there were a total of 17 Democrats (actually, 16 Democrats and one independent) in the chamber who voted for cloture. The same group of senators voted with Republicans to approve the bill. For their efforts, they were already being called the “Bailout Caucus.”
Why is S.2155 a bad bill? For one thing, nicknames for this bill suggest that the legislation 1) will mainly help large banks at the expense of consumers 2) is a load of crap. (Sorry, I couldn’t help myself). Here is a breakdown.
What Will This Bill Do?
In short, the legislation will weaken, if not destroy, Dodd-Frank, the law passed in 2010 to avert a financial crisis like the one we saw in 2008. Here are some key parts of the Bank Lobbyist Act:
- The threshold for what is considered a “Too Big to Fail” bank is raised from $50 billion in assets to $150 billion in assets.
- The banks that collectively received tens of billions in TARP funds will be subject to weaker risk controls. That means they will not have to undergo “stress tests,” which are designed to inform regulators of disaster plans these banks have.
- Too Big to Fail banks, like Citibank and Goldman Sachs, will face lower capital requirements. That means banks will not have to reserve as many funds to cover losses.
- Consumers will have fewer mortgage protections, especially if they are purchasing manufactured homes or have their money in banks with less than $10 billion in total assets.
- The bill establishes major exemptions for the Home Mortgage Disclosure Act. It will make it easier for banks to discriminate against woman and people of color.
The House of Representatives already passed their version of the Bank Lobbyist Act, but it remains to be seen if the House will go back and pass a more aggressive version to hit Dodd-Frank harder. Regardless, when this legislation is made law, it increases the likelihood that there will be another huge financial crash, one that could be worse than the crash we experienced in 2008.
Naming Names
The people who voted for this bill are:
- All the Republicans who were present*
- Doug Jones (Alabama)
- Michael Bennet (Colorado)
- Tom Carper (Delaware)
- Chris Coons (Delaware)
- Bill Nelson (Florida)
- Joe Donnelly (Indiana)**
- Angus King (Maine)
- Gary Peters (Michigan)
- Debbie Stabenow (Michigan)
- Claire McCaskill (Missouri)**
- Jon Tester (Montana)**
- Jeanne Shaheen (New Hampshire)
- Maggie Hassan (New Hampshire)
- Heidi Heitkamp (North Dakota)**
- Tim Kaine (Virginia)
- Mark Warner (Virginia)
- Joe Manchin (West Virginia)**
* John McCain wasn’t present for the vote.
** Five of the Democrats mentioned here are facing stiff re-election campaigns in red states. In polls against generic Republicans, they were projected to lose.
The Democrats in bold voted to re-confirm Ajit Pai.
Why This Is Bad for the Democrats
Although all the Republicans supported the bill, there are few reasons why this vote can hurt the Democrats.
1. The Fight over This Bill Once Again Exposed the Deep Rift Between Progressives and Centrist Democrats.
All the Democrats who voted for S.2155 are centrists. Progressives like Sen. Elizabeth Warren and Sherrod Brown led the charge against this bill. The two were so infuriated by the vote that they were among the senators who called out their Democratic colleagues and they echoed the sentiments of activists and progressive voters.
Progressives are angry at the Democratic establishment because they see nothing being done to combat income inequality and they don’t feel that they are being heard. This vote further proves that point.
2. This Vote Happened During an Election Year.
The Democrats are currently out of power in Congress and 10 in the Senate have to compete in states that Trump carried in 2016. Sure, some of these Democrats gave the excuse that voting for this bill gave them bipartisan cred, voters see through that BS. For example, Doug Jones had no good reason to vote for this bill since he wouldn’t be up for re-election any time soon. Tim Kaine had no good excuse to do it since he was in a purple state and not up for re-election.
The vote for this bill vindicates those who were critical of the party and legitimizes the call for some of these guys to get primaried. I was already banging the drum to get Joe Manchin out. Now the same goes for McCaskill, Heitkamp, Tester, and all the others who voted with Republicans here. The Republicans need to go, too.
3. The Democrats Who Voted for This Bill Prove That They Are Bad at Politics.
Again, these fools are doing this during an election year and there was no reason to rush this bill. However, they had the tacit approval of Senate Majority Leader Chuck Schumer. While Sen. Schumer voted against the bill, he only did it for the optics. He had the ability to kill the bill by rallying enough Democrats to kill the bill because 60 votes were needed.
4. While the Democrats Might Not Be As Bad as the GOP, the Party’s Leadership is Still Bad.
Both parties are led by corporatists and greedy folks. The fact of the matter is that those who voted for it did it for financial reasons.
The Democratic and independent senators who voted with the Republicans will benefit financially — and not just from donor cash.
As Alex Kotch points out in the video:
- Heidi Heitkamp, the chief architect of the Bank Lobbyist Act, owns up to $250,000 in JP Morgan stock with her husband. She also owns up to $550,000 in stock from Berkshire Hathaway, the company owned by Warren Buffett.
- The bill would benefit companies like Berkshire Hathaway which also have lending services. Those businesses could steer renters to those services.
- Even small banks would be allowed to withhold key data from regulators, like the age, gender, and ethnicity of each borrower.
- Tim Kaine, who has boasted of his work as a lawyer to fight for fair lending and against racial discrimination in the mortgage, voted for the bill despite having no stake in the companies that will benefit from the bill.
- Clair McCaskill and her husband own over $1,000,000 in stock from Berkshire Hathaway.
- Gary Peters owns about $250,000 in five of the banks that stand to benefit from the legislation, including Bank of America, BB&T, and UBS (which holds a significant amount of U.S. assets).
- Joe Manchin’s wife owns up to $100,000 of Huntington Bank Share stock.
- Doug Jones owns up to $250,000 in Regents Corporation stock.
- Angus King owns up to $50,000 in U.S. Bank Corp. stock.
- Tom Carper owns up to $45,000 in Bank of America, Goldman Sachs, and Wells Fargo stock.
And we’re supposed to vote for this?
Dodd-Frank is under attack because 17 people in the Senate Democratic Caucus are co-conspirators. They need to be voted out along with the craven Republicans.
Shmaltz and Menudo 