House Democrats
derailed an attempt by Republicans to fast-track legislation gutting the Dodd-Frank Wall Street reforms last week. House leadership assumed they could get enough Democrats on board to pass the legislation with no debate or amendments, but failed to get the two-thirds majority they needed. So they're back at it this week, but now have to pass the legislation under the regular rules.
The bill has a title that would make George Orwell proud, the "Promoting Job Creation and Reducing Small Business Burdens Act," and actually has nothing to do with small business, unless private equity firms count as small business. Mother Jones provides the gory details on what it would actually do. That includes delaying the Volcker rule, which clamps down on the high-risk trading that commercial banks participated in that helped to cause the financial crisis. It would also weaken the rules on private equity firms, exempting some of them from having to register as brokers. If those firms get paid for providing investment banking services, they have to register with the Securities and Exchange Commission as brokers under the law. Because they are acting as brokers. But Republicans believe they shouldn't be subject to the additional oversight brokers are subject to, even though they're acting as brokers.
Remember derivatives? They were a key part of the Wall Street casino that came crashing down in 2008. They're financial instruments that don't have collateral behind them or actual value, just value based on "underlying numbers, such as crop prices or interest rates." This legislation would loosen the new regulations on derivative trading, removing much of the oversight on the trades and prohibiting regulators from requiring that banks demand collateral from the companies buying derivatives. So we'd be back to Wall Street tossing around billions worth of unbacked poker chips.
And just to make sure that all of this happens out of the glare of the public eye, this bill would weaken the transparency rules that Dodd-Frank imposed on publicly traded companies. It would exempt the majority of them from the rules about what has to be included in their financial statements filed with the SEC. That includes allowing some to omit historical data showing their past financial performance.
The bill only needs a majority to pass this time around, and should handily, with or without the Wall Street Democrats they had last week. If one of those 35 Democrats is your representative sign and send this petition: Stop selling out to Wall Street.
Wed Jan 14, 2015 at 1:29 PM PT: The legislation passed Wednesday.