Seventy House Democrats voted with the GOP to undo the part of Dodd-Frank financial reform law that prevents banks from engaging in risky derivatives trading with funds insured by government programs like deposit insurance. The GOP says the rule is unnecessary and would be expensive for banks. (We weep for the poor, put-upon Wall Street banks.). This is the eighth bill the House has passed in their attempts to dismantle financial reform.
New Democrat Coalition members formed the majority of these votes with three-fourths of the New Dems voting against President Obama's position that any weakening of Dodd-Frank opens the door to dismantling it.
Indeed, the New Dems are the "Coalition that Pharma and Wall Street Love."
Not having this rule and other rules preventing banks from gambling with tax-payer insured deposits proved expensive to us (CBO estimates $21 billion) and the economy. Credit derivatives helped push the insurance giant American International Group (AIG) to the brink of collapse in 2008.
According to Dennis Kelleher of financial reform group, Better Markets:
"This bill would allow Wall Street's too big to fail banks to use insured deposits for their derivatives trading and gambling. That is indefensible."
Representative Collin C. Peterson, Democrat of Minnesota echoed
“It is clear that Wall Street has not learned its lesson. This bill would effectively gut important financial reforms and put taxpayers potentially on the hook for big banks’ risky behavior.”
As is often the case, Hawaii's only conserva-Dem Congressional member, Colleen Hanabusa, joined the GOP and the other New Democrat Coalition members in voting for the Wall Street Bank interests.
According to the New York Times:
Citigroup lobbyists drafted more than 70 of the 85 lines of the House bill.
Predictions are that the Senate will not pass this bill. Progressive Senator Brian Schatz
(D-HI) is expected to vote no. What a different scenario we'd have if Colleen Hanabusa is successful in her primary challenge to him.
Below the fold, New Dems and how they voted.
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