Returning after a nice holiday weekend, the House of Representatives did one of the things it does best: cater to the interests of Wall Street. The House passed two financial deregulation bills with sizable bipartisan majorities.
The first of the two bills--H.R. 1341, Financial Competitive Act--passed easily 353 to 24. All 24 opponents were Democrats. The majority of Democrats (146), including the party leadership, sided with Republicans and voted for passage. 57 representatives (26 Republicans, 31 Democrats)--including progressives like Rush Holt and Frank Pallone who are out campaigning-- were not there for the vote.
H.R. 1341 would require the Financial Stability Oversight Council to study differences in how the U.S. and other countries implement capital requirements for derivatives. The Hill provides the following background:
Countries negotiating the Basel III agreement on bank capital requirements have agreed that banks exposed to derivatives risk must increase their capital buffer. But European countries have said some derivatives transactions would be exempt from these new capital requirements.
The bill would simply study what effects that difference might have, including effects on derivatives end users.
In other words, Republicans and corporate Democrats want to weaken our regulation of derivatives because Europe regulates too lightly and are laying the foundation for doing so.
Which 24 Democrats said NO to financial deregulation?
Xavier Becerra (CA-34)
Steve Cohen (TX-09)
John Conyers (MI-13)
Peter DeFazio (OR-04)
Donna Edwards (MD-04)
Keith Ellison (MN-05)
Sam Farr (CA-20)
Alan Grayson (FL-09)
Gene Green (TX-29)
Raul Grijalva (AZ-03)
Mike Honda (CA-17)
Barbara Lee (CA-13)
Zoe Lofgren (CA-19)
Alan Lowenthal (CA-47)
Ben Ray Luján (NM-03)
Ed Markey (MA-05)
Jim McDermott (WA-07)
Jim McGovern (MA-02)
Jerry Nadler (NY-10)
Rick Nolan (MN-08)
Chellie Pingree (ME-01)
Jan Schakowsky (IL-09)
Jose Serrano (NY-15)
Louise Slaughter (NY-25)
The second bill--H.R. 1564, the Audit Integrity and Job Protection Act--also passed easily, 321 to 62. (Don't you just love the inclusion of "job protection" in the name?) The bill would overrule a decision by the Public Company Accounting Oversight Board to require small public companies to periodically rotate their outside auditors. All 62 opponents were Democrats, but a majority of the caucus (110) sided with Republicans. 51 representatives (22 R, 29D) were not in attendance for the vote.
Only one of the 24 opponents of H.R. 1341 voted FOR H.R. 1564: Rick Nolan. The other 23 were consistent in their opposition to financial deregulation and were joined by 39 peers from the party.
Here's some background on the legislation:
Established by Congress under SOX following the corporate and accounting scandals at Enron Corporation, Tyco International Ltd., Adelphia Communications Corporation, and WorldCom, the PCAOB is a nonprofit corporation that oversees the audits of public companies and broker-dealers in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports.
The PCAOB issued a concept release in August 2011 on ways to enhance auditor independence, objectivity, and skepticism in which the possibility of mandatory audit firm rotation was raised. Several public meetings on the concept release were held late last year by the PCAOB to gauge feedback from academics, investors, audit committee members, corporate officers, auditors, and other interested parties.
Proponents of a rotation system believe that setting a limit on the continuous stream of audit fees that an auditor may receive from one client would significantly free the auditor from the effects of management pressure and offer an opportunity for a fresh look at the company's financial reporting, the PCAOB stated in the concept release.
Opponents cite unnecessary additional costs that would be passed on to investors and consumers, as well as the possibility that audit quality would suffer as a result of firm rotation.
Who were the 39 additional Democrats to say NO to financial deregulation?
Karen Bass (CA-37)
Blumenauer (OR-03)
Suzanne Bonamici (OR-01)
Brady (PA-01)
Mike Capuano (MA-07)
Cartwright (PA-17)
Judy Chu (CA-27)
David Cicilline (RI-02)
Joe Crowley (NY-14)
John Dingell (MI-12)
Lloyd Doggett (TX-35)
Mike Doyle (PA-14)
Eliot Engel (NY-16)
Anna Eshoo (CA-18)
Fattah (PA-02)
John Garamendi (CA-03)
Janice Hahn (CA-44)
Jared Huffman (CA-02)
William Keating (MA-09)
Joseph Kennedy (MA-04)
Sander Levin (MI-09)
Doris Matsui (CA-06)
Grace Napolitano (CA-32)
Bill Pascrell (NJ-09)
Nancy Pelosi (CA-12)
Mark Pocan (WI-02) [He had not been in attendance for the other vote]
Lucille Roybal-Allard (CA-40)
Tim Ryan (OH-13)
Linda Sánchez (CA-38)
Loretta Sanchez (CA-46)
John Sarbanes (MD-03)
Adam Smith (WA-09)
Mark Takano (CA-41)
Mike Thompson (CA-05)
John Tierney (MA-06)
Paul Tonko (NY-20)
Niki Tsongas (MA-03)
Henry Waxman (CA-33)
John Yarmuth (KY-03)