The NY Times is reporting today that Republicans are likely to come on board financial reform, and thus far Dems haven't had to give much for that.
Senate Republicans on Wednesday reported progress in negotiating changes to the wider bill. But they did not point to any specific concessions they had won, and Democrats said they made none....
But Democrats seized on his defection as a sign that Republicans were finding it increasingly untenable to oppose the legislation. Democrats said they would to push for a first procedural vote on Monday, in what could be a serious test of Republican resolve.
Senior Democrats said they viewed the vote as a no-lose proposition forcing Republicans to agree to begin debating the bill or be seen as obstructing it.
There are a couple of things Dems need to be honing in on now that is seems they've broken through an obstruction logjam. The first is Elizabeth Warren's vision for the CFPA.
The CFPA presents the first real opportunity to change that harmful structure.
First, the CFPA will regulate consumer financial products across the board-using the same rules for all mortgages or for all small dollar loans, regardless of whether the mortgage or the loan is issued by a national bank, a state bank or a non-bank. The old practice of different sets of rules and different regulatory structures for the same products would disappear. Instead, the CFPA would create a coordinated set of baseline rules applicable across the board....
Consistent rules are important, but, as we now know, it isn't enough to have good rules on the books. There must also be a serious effort to enforce those rules. With the right sources of funding and some smart strategic thinking about how to force non-banks to follow the same rules as other lenders, the entire landscape of consumer lending would change.
From history, we have learned that an agency's source of funding is critical to its success. By allowing the Agency to tax lenders directly -- perhaps a dime for every open credit card account, a quarter for every open mortgage, etc. -- Congress can make sure that the CFPA stays well-funded in the years ahead. The right funding structure will allow the Agency to develop the capacity to go after the non-banks and the dangerous products they originate, and it will insulate the Agency from political efforts to starve-the-regulators into inaction....
The CFPA can also get smarter with enforcement by exploiting concentration points, places where small players are effectively grouped together. In the case of mortgage brokers, for example, without the large bank holding companies and their subsidiaries as customers for the loans they place, many would be out of business. Focusing regulatory attention on the buyers would create substantial leverage over the brokers as well. If the sponsors and funding mechanisms for the worst practices go away, so will the worst practices.
There is more that we can do to deal with non-bank lenders, but only if Congress creates a strong CFPA. If we stick with the status quo -- which treats loans differently depending on who issues them and places consumer protection in agencies that consider it an afterthought - we know what will happen because we have seen it happen before. Lenders will continue their tricks and traps business model, the mega-banks will exploit regulatory loopholes, and the non-banks will continue to sell deceptive products. In that world, small banks will need to choose between lowering standards or losing market share, and they will still get too much attention from regulators while the non-banks and big banks get too little. Dangerous loans will destabilize both families and the economy, and we'll all remain at risk for the next trillion-dollar bailout.
The second thing they need to do to really get some teeth in this bill is to pass the Brown-Kaufman Safe Banking Act. At Baseline Scenario, Simon Johnson argues for the amendment, and how you can help make it happen:
What can you do? What makes sense in both economic and political terms?
Call your Senator, call Senator Harry Reid (Senate majority leader), and call the White House. Tell them that you support the Brown-Kaufman SAFE banking act (unveiled yesterday) – as an amendment that would greatly strengthen the Dodd bill by capping the size and leverage of our biggest banks. Politely ask the people who answer the phone to make certain that this amendment gets an “up or down vote” in the Senate.
The Brown-Kaufman act is our best near-term chance to reduce the size of Wall Street megabanks that are too big to fail and that threaten our economy. (If you don’t understand why this is important, read 13 Bankers; quickly – this could all be over by this time next week.)
Tell everyone you know why this makes sense and ask them to make the call also. These calls will determine the outcome. If the Democratic leadership understands the groundswell of support for breaking up big banks, the Brown-Kaufman proposal has a chance to come to the floor – and who exactly on the Republican side would like to be on the record as opposing it?
The Brown-Kaufman amendment needs to come to the floor. Reid and Dodd will determine whether it does.