Can New Dems Deliver Preemption?
Following last week’s unveiling of his newly-modified draft bill to create a Consumer Financial Protection Agency (CFPA), House Financial Services Chairman Barney Frank (D-MA) announced Wednesday his intention mark up the bill the week of October 12. While the philosophical debate between House Democrats and Republicans over the CFPA’s creation may be coming to a close, the debate amongst Democrats over the CFPA’s contours may be just beginning.
Federal preemption of state banking regulations is one of the first issues to divide Democrats. During Wednesday's committee hearing, Democratic lawmakers expressed concerns over a provision in Frank’s draft that would scrap federal preemption laws related to consumer protection. The Frank bill would have the CFPA set a minimum federal threshold and enable the states to set stricter rules if they choose. The potential exposure of nationally chartered banks to different consumer financial protection laws in every state is a prospect some fear would be overly cumbersome.
Leading the charge for federal preemption are third-term Congresswoman Melissa Bean (D-IL) who currently serves as Vice-Chair of the business friendly New Democrat Coalition and Rep. Jim Himes (D-CT), a freshman and former investment banker. Bean and Himes co-chair the New Democrats’ Financial Services Task Force and are in the process of drafting an amendment to Frank’s bill that would shield federally chartered banks from certain state consumer protection regulations. Despite their overall support for the CFPA, Bean said they want to ensure regulatory consistency through the CFPA's national standards.
Although Frank is dismissive of concerns that federal preemption is necessary to avoid market disruptions, Edward L. Yingling, President and CEO of the American Bankers Association (ABA), warned at the hearing that Frank’s current draft legislation would create a “patchwork of state, and even local, laws that will confuse consumers.” About a third of the majority side of the Financial Services Committee are New Democrats so Bean and Himes have some leverage, especially if committee Republicans side with them. Some of our FR Watch sources predict that Frank will concede on this, and a majority of the committee members will ultimately vote for the preemption amendment.
Sounds like the New Dems are Republicans who ran and won as Democrats because they couldn't get elected as Republicans and/or deliberately ran as Democrats to prevent real Democrats from getting elected. A REAL Democrat would have the consumer's interest as paramount. There must always be a balance between business and consumers, Republicans can look out for the Corporations, but it is the Democrats job to provide push back for consumers or our entire economy is compromised in a Capitalist system. Too much freedom invites corruption, theft, and all the greedy bad actors who cannot see the impact of their actions on others and the system as a whole. Capitalism requires a healthy balance between business and consumers. The only way the outragous practices that brought our financial industry to it's knees to be put in much needed check is for these New Democrats to understand their roll in the equation or face certain defeat at the polls as I am sure the left will pull out all stops to bring them down their next election. Regulation NOW. The wholesale theft of American wealth must stop NOW. From a Libertarian who recognizes the logic of a balanced economy as a rational self interest. Unfettered business will suck all the life out of an economy seeking the almighty immediate dollar without the foresight of long term interests of the survival of their business.
Oh, I also want to remind these New Dems, Republicans, Blue Dogs, and any others who might oppose this new regulation that huge swaths of Americans are rightously angry over the losses of pensions, investments, and our tax dollars given to the very entities who scammed them. Beware, you are being watched to see that you speak loud and clear in their interests. All the Corporate donations you are wooing and all the anti-reform advertising in world are not going to swade the aggrieved voter in the voting booth.
I am not a financial person but New York State has had the advantage of a law called the Martin Act which has allowed our attorney generals to investigate some financial companies. A few years ago some of the financial companies were complaining to the federal government and regulatory agencies on the unfairness of Spitzer in using this law. If I had my way all 50 states would have their own laws and if a national or international bank did not like the laws of a state they they could opt out of doing business in that state rather than robbing the residents of that particular state. Where is it stated in our laws that they can be thieves in every state. I would urge some people to look up the implications of the Martin Act of NYS.