Flush with Cash From Bank Lobbyists, Conservative Dems Are Killing the Consumer Protection We All Need
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The House Financial Services Committee is full of loudmouthed conservative ideologues and right-wing eccentrics.
Just about every time the panel meets, you can expect to hear a long sermon about anything from the price of gold to the sanctity of Wall Street CEOs' obscene paydays.
Earlier this year, the top Republican on the panel, Rep. Spencer Bachus of Alabama, made a public embarrassment of himself when he went around boasting to reporters about the secret list of congressional "socialists" he had compiled.
Fortunately, Bachus and his cohorts pose almost no threat to the legislative process. After the 2008 elections, the Financial Services Committee swelled to 71 members, with Democrats holding a commanding 42-29 majority.
The panel is chaired by Barney Frank of Massachusetts, one of the most capable lawmakers in Congress. If Democrats want to do just about anything to rein in abusive practices in mortgage lending, credit cards or payday loans -- or to stem the tide of foreclosures -- they can get it done without the support of the committee's right-wing zealots.
But it has failed to take serious action on any of these fronts this year.
The standard partisan conflict between Democrats and Republicans doesn't capture the main source of tension on the panel. The real contest is between bankers and citizens. And if you include the 17 Democrats who are card-carrying members of the conservative Blue Dog and New Democrat coalitions, the banks hold a four-seat majority.
If you add in the otherwise centrist or progressive members who routinely vote with the bank lobby, then the advantage increases to seven or eight seats. Big Finance wins.
Even after watching the banking industry drive the entire global economy into the worst crash since the Great Depression with a flood of predatory mortgages, Congress has still been unable to stomach any change to our regulations protecting borrowers that isn't banker-approved.
You won't see them standing up and making grandiose speeches in defense of Wall Street's inalienable right to pillage our pocketbooks, but behind the scenes, dozens of Democrats are doing hatchet work for the nations' biggest banks.
Take Rep. Walter Minnick, D-Idaho. In 2008, he was elected as the first congressional Democrat to represent the state in 15 years, and he quickly threw in his lot with the Blue Dog Coalition, one of eight such members on the Financial Services Committee.
He cut his teeth in politics as an aide to President Richard Nixon in the '70s, but his economics are significantly to the right of his former boss. He voted against President Barack Obama's stimulus package early this year, and he earned a perfect score from the radical right-wing anti-tax group Club for Growth. On economic issues, he's as predictable as Minority Leader John Boehner, R-Ohio.
Last week, Politico reported that he was pushing a plan to scrap Obama's proposal for a Consumer Financial Protection Agency. Frank was quick to tell the Huffington Post that Minnick's idea was not being seriously considered, but Minnick's spokesman tells me he is still talking with Frank, and that the two "share similar goals" about making sure companies are subject to "appropriate regulations."
Frank just released a new bill watering down the legislation suggested by Obama. Minnick has not yet destroyed the CFPA entirely, but he and his cohorts have already extracted a few pounds of flesh.
It's pretty easy to figure out who is giving Minnick his marching orders. On the morning of Sept. 24, he lashed out against the CFPA in a speech before the U.S. Chamber of Commerce. The Chamber of Commerce is the most powerful lobbying machine for the corporate executive class, and it's dedicating massive resources to kill regulations that would protect consumers, taxpayers and the economy as a whole from Wall Street's excesses.