DownWithTyranny!: Conservative Victories Next Week Mean More Power To The Banksters-- More Watering Down Of Dodd-Frank

This week, Paul Ryan has been pushing a new GOP talking point about how Dodd Frank is to the banking system what Obamacare is for the healthcare system. In other words, he's way on board with Wall Street whore and House Financial Services Committee chair Jeb Hensarling in wanting to repeal or dismantle the consumer (and societal) protections, as weak as they were, in Dodd Frank. The two clowns claim they just want to liberate people from bureaucracy. Like wrecking the Consumer Financial Protection Bureau which, says Hensarling, is "the single most unaccountable agency in the history of America... We’ve all heard about Wall Street greed. I think people are now starting to be a little bit more sensitized to Washington greed-- the greed for power and control over our lives and our economy."

Ryan's analogy linking the Affordable Care Act and Dodd-Frank may be mostly fodder for grotesquely ignorant GOP base voters but there is a valid point, albeit not one that could have possibly crossed Ryan's teeny-weeny mind. Both were half-assed, timid political solutions to urgent problems. Instead of universal single payer, Obamacare leaves people still at the mercy of predatory insurance and drug companies and instead of an end to "too big to fail," Wall Street (political donors) are still in the cat bird's seat (instead of prison).

This week MarketWatch predicted that if the Republicans get control of the Senate, they will work towards destroying even the incremental reform in Dodd-Frank. New Dems and Blue Dogs are eager to help them, particularly Wall Street's best paid Democratic whores like Jim Himes (New Dem-CT, $955,124 this cycle alone), Joe Crowley (New Dem-NY, $1,018,372 this cycle alone), Patrick Murphy (New Dem-FL, $836,200 this cycle alone), and Steve Israel (Blue Dog-NY, $809,600 this cycle alone).

Republicans will likely target the Consumer Financial Protection Bureau and capital requirements on insurance companies if they take the Senate.

Any changes the Republicans seek will be tempered by the fact they won’t have a veto-proof hold of the U.S. Senate. Democrats also would have the ability to filibuster, points out Ed Groshans, financial advisor to Height Analytics LLC.

But analysts do see room for the Republicans to temper the Dodd-Frank Act, the 2010 law passed in the wake of the financial crisis.

One of the pieces of Dodd-Frank law that Republicans have criticized is the Consumer Financial Protection Bureau, having blocked the confirmation of its director. Eventually, after a rules change in the Senate, Richard Cordray was confirmed to the role.

Aaron Klein, director of Financial Regulatory Reform Initiative at the Bipartisan Policy Center, said there might be more oversight of the bureau by having an inspector general.

Another potential change would be the revision of capital requirements under the law. Earlier this year, the House of Representatives passed a bill that said federal regulators would not to include insurance regulators for capital requirements.

Michael Barr, professor at University of Michigan Law School and the previous assistant secretary of Treasury, said there could be attempts to weaken rules on derivatives and to prevent the Financial Services Oversight Committee from regulating insurance firms. American International Group has fallen under FSOC oversight, and FSOC is looking to extend that to MetLife.

Another possible change to the law could come with changing the amount in assets for systemically important financial institution threshold, which requires banks and bank-holding companies with at least $50 billion in consolidated assets to have more prudential supervision.

Banksters have already been getting away with murder-- whenever conservatives can assert influence over the regulatory process. This week, a news report in Bloomberg asked the simple question: "have regulators been too soft on Wall Street?"

At the SEC, there are three main penalties that banks seek waivers for when they settle cases, with the harshest a ban on managing mutual funds. Another prevents banks from raising money for private companies. The third, and most minor, takes away a privilege that allows a firm to issue its own shares or bonds without SEC approval.

For Bank of America, the biggest hold-up is over the waiver that will allow the bank to continue seeking investors for private firms, such as technology companies that haven’t yet gone public and hedge funds, the people said.

“It seems to me it would be important for them to have that waiver,” said Richard A. Kline, a law partner at Goodwin Procter LLP in Menlo Park, California. When fast-growing companies are seeking to raise money from institutions, “there are often banks that will lead some of those private placements,” he said.

Lawrence Grayson, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment.

Proponents of issuing waivers say the exemptions are needed, because the punishments behind them are blunt instruments created for egregious frauds, mainly by small-time schemers and boiler-room operators. Penalties kick in automatically when a judge approves a settlement, making it necessary for a company to arrange for an exemption beforehand... Banks have historically sought relief from the extra punishments by arguing that the sanctions are severe, too broad, and target units that had nothing to do with the fraud.

Bank of America’s settlement with the Justice Department, SEC, other agencies and a handful of states resolved allegations that it sold shoddy mortgage securities without disclosing all the risks to investors. Most of the alleged wrongdoing involved Merrill Lynch and Countrywide Financial, companies Bank of America bought.

...The uprising over waivers has been led by SEC Commissioner Kara Stein and her fellow Democrat Luis Aguilar, who argue that additional sanctions are sometimes justified, especially for banks that get in trouble again and again.

“The commission and its staff should not be in the business of rubber-stamping and approving all waiver applications simply because a request is made,” Aguilar said.

In April, he and Stein voted against the commission’s decision to approve a waiver for Royal Bank of Scotland Group Plc after one of its subsidiaries pleaded guilty to rigging benchmark interest rates. Stein went public with her dissent, questioning whether the SEC’s action had “enshrined a new policy, that some firms are just too big to bar.”

She and Aguilar also successfully pushed SEC Chair White to devise new written policies on waivers, which aren’t granted in every case. Credit Suisse and Citigroup Inc. (C), for example, didn’t get exemptions in recent years.

Withholding relief can be a “very powerful” deterrent for bank misconduct, said Stein, who since joining the SEC in August 2013 has voted against five waivers that were all granted by the agency.

“Firms need to understand there are consequences to criminal behavior and bad actions,” she said in an interview.

My own congressman, Blue Dog/New Dem Adam Schiff has taken $1,023,186 from the Finance Sector since first being elected to Congress in 2000. The corrupt, conservative Schiff, who was redistricted into one of the most progressive districts in the country, has no Republican opponent next week. Establishment Republicans love him; he represents their sick worldview. But a progressive independent, Steve Stokes, is fighting a Quixotic battle against him-- and one of the issues Stokes keeps bringing up is the inadequancy of Dodd-Frank. He points out that the act was "Congress' attempt to show voters they were getting tough on lenders. Dodd-Frank was a Trojan horse diversion to make it appear that big banks were being regulated. When the Dodd-Frank Act was passed to regulate the financial industry it did so by placing crippling and unnecessary restrictions on independent financial professionals to the benefit of the large banks. Congress was able to say 'look we reformed the financial system' but all they did was make it even easier for big corporations to dominate the market and more expensive for the American consumer. The part of the law that pertained to regulating big banks was watered down due to the influence of the banking lobby."

With Barbara Boxer retiring in 2016, Schiff is hoping to represent the Republican wing of the Democratic Party in the unseemly scramble for her seat that has begun behind the scenes. A vote for Stokes by CA-28 progressive voters next Tuesday probably won't defeat Schiff in his reelection effort, but it could help slow down his disgusting Senate ambitions.