LIVE on C-Span2: Senate Debating Financial Reform. As Biden would say, This is a big f*cking deal!

Obama Rips GOP Financial Reform Amendment That Would 'Gut Consumer Protections'

Ben Frumin
May 6, 2010, 12:03PM


President Barack Obama

President Obama released a statement today about a GOP amendment to financial reform that "will gut consumer protections and is worse than the status quo."

Here's the full text:

Nearly two years after the collapse on Wall Street that cost over 8 million jobs on Main Street, the American people deserve strong, tough reform that will help prevent another financial crisis. The bill before the Senate demands accountability from Wall Street and includes the strongest consumer protections ever.

Unfortunately, throughout this debate, there have been partisan attempts to obstruct progress and weaken reform. Today, the Senate is considering a Republican amendment that will gut consumer protections and is worse than the status quo. I will not allow amendments like this one written by Wall Street's lobbyists to pass for reform. This amendment will significantly weaken consumer protection oversight, includes dangerous carve outs for payday lenders, debt collectors, and other financial services operations, and hurts the ability of community and local banks to compete by creating an unlevel playing field with their non-bank competitors.

As I have said throughout this process, I want to continue to work with Democrats and Republicans because protecting the American people should not be a partisan issue. But we must work together in good faith. Alternatives that gut consumer protections and do nothing to empower the American people by cracking down on unfair and predatory practices are unacceptable, and I urge the Senate to vote no on weakening consumer protections and instead stand with the American people.

http://tpmlivewire.talkingpointsmemo.com/2010/05/obama-rips-gop-financial-reform-amendment-that-would-gut-consumer-protections.php?ref=fpa

Franken, Feingold sign on to big-bank-busting measure, bringing total to 11 Senators

Okay, I've got more signs for you that Senate liberals may be gaining momentum with their efforts to toughen up financial reg reform.

Senators Al Franken and Russ Feingold have signed on to an amendment to FinReg -- being pushed hard by liberal Senators -- to break up the country's biggest banks by capping their desposits and limiting other liabilities.

That brings the total number of Senators backing this approach -- which is not supported by the White House -- to 11. It's still unclear whether the amendment will get a vote, but the mounting support could up the pressure for one.

Senator Franken's office confirms to me that he's now on board with the proposal. Feingold gave a speech on the Senate floor moments ago coming out in support of it, too.

This approach, which is the handiwork of senators Sherrod Brown and Ted Kaufman, is a serious challenge to Wall Street and represents an ambitious effort to rein in the power of the biggest banks and limit their destructive potential.

more...

By Greg Sargent
May 6, 2010

http://voices.washingtonpost.com/plum-line/2010/05/franken_feingold_sign_on_to_to.html

52 Republicans and 38 Democrats voted for the bill. Sen. Richard Shelby of Alabama (Republican, formerly a Democrat) voted against it, as did 7 Democratic Senators: Barbara Boxer (Calif.), Richard Bryan (Nevada), Byron Dorgan (N. Dakota), Russell Feingold (Wisc.), Tom Harkin (Iowa), Barbara Mikulski (Maryland) and Paul Wellstone (Minn.) Sen. Peter Fitzgerald (R-Illinois) again voted "present", while Sen. John McCain (R-Arizona) did not vote.

http://en.wikipedia.org/wiki/Gramm–Leach–Bliley_Act

Posted on Sun, Oct. 12, 2008

Private sector loans, not Fannie or Freddie, triggered crisis

David Goldstein and Kevin G. Hall | McClatchy Newspapers

last updated: February 19, 2010 02:01:13 PM

WASHINGTON — As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.

Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

*More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
*Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
*Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.
*The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday.

Conservative critics claim that the Clinton administration pushed Fannie Mae and Freddie Mac to make home ownership more available to riskier borrowers with little concern for their ability to pay the mortgages.

more...

http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fannie.html

Late Evening Senate Action

David Kurtz | May 6, 2010

The Senate is still voting this evening on amendments to the financial reform bill. However, the "audit the Fed" amendment by Sen. Bernie Sanders (I-VT) that we were expecting to see passed tonight has been delayed after some last-minute maneuvering.

Sen. Bob Bennett (R-UT) wanted to be present for the vote, but he's back in Utah fighting for his political life in advance of this weekend's state GOP convention where he may very well lose his party's nomination. Apparently Bennett didn't want to miss this vote and have that used against him by his opponent in the closing hours of their campaign.

Despite that delay, the politics of financial reform have shifted significantly in recent days, and the Senate is now expected to pass a series of amendments that will significantly strengthen the bill's reforms.

Late Update: A long-shot to pass, the amendment by Sens. Sherrod Brown (D-OH) and Ted Kaufman (D-DE) to put absolute limits on the size of financial institutions just went down to defeat, 33-61.

http://www.talkingpointsmemo.com/archives/2010/05/late_evening_senate_action.php?ref=fpblg

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=2&vote=00136

American Financial Stability Act of 2010)
Statement of Purpose: To impose leverage and liability limits on bank holding companies and financial companies.
Vote Counts: YEAs 33
NAYs 61
Not Voting 6


Grouped By Vote Position

YEAs ---33

Begich (D-AK)
Bingaman (D-NM)
Boxer (D-CA)
Brown (D-OH)
Burris (D-IL)
Cantwell (D-WA)
Cardin (D-MD)
Casey (D-PA)
Coburn (R-OK)
Dorgan (D-ND)
Durbin (D-IL)
Ensign (R-NV)
Feingold (D-WI)
Franken (D-MN)
Harkin (D-IA)
Kaufman (D-DE)
Leahy (D-VT)
Levin (D-MI)
Lincoln (D-AR)
Merkley (D-OR)
Mikulski (D-MD)
Murray (D-WA)
Pryor (D-AR)
Reid (D-NV)
Rockefeller (D-WV)
Sanders (I-VT)
Shelby (R-AL)
Specter (D-PA)
Stabenow (D-MI)
Udall (D-NM)
Webb (D-VA)
Whitehouse (D-RI)
Wyden (D-OR)

NAYs ---61
Akaka (D-HI)
Alexander (R-TN)
Barrasso (R-WY)
Baucus (D-MT)
Bayh (D-IN)
Bennet (D-CO)
Bond (R-MO)
Brown (R-MA)
Brownback (R-KS)
Burr (R-NC)
Carper (D-DE)
Chambliss (R-GA)
Cochran (R-MS)
Collins (R-ME)
Conrad (D-ND)
Corker (R-TN)
Cornyn (R-TX)
Crapo (R-ID)
Dodd (D-CT)
Enzi (R-WY)
Feinstein (D-CA)
Gillibrand (D-NY)
Graham (R-SC)
Grassley (R-IA)
Gregg (R-NH)
Hagan (D-NC)
Hatch (R-UT)
Hutchison (R-TX)
Inhofe (R-OK)
Inouye (D-HI)
Isakson (R-GA)
Johanns (R-NE)
Johnson (D-SD)
Kerry (D-MA)
Klobuchar (D-MN)
Kohl (D-WI)
Kyl (R-AZ)
Landrieu (D-LA)
Lautenberg (D-NJ)
LeMieux (R-FL)
Lieberman (ID-CT)
McCain (R-AZ)
McCaskill (D-MO)
McConnell (R-KY)
Menendez (D-NJ)
Murkowski (R-AK)
Nelson (D-FL)
Nelson (D-NE)
Reed (D-RI)
Risch (R-ID)
Roberts (R-KS)
Schumer (D-NY)
Sessions (R-AL)
Shaheen (D-NH)
Snowe (R-ME)
Tester (D-MT)
Thune (R-SD)
Udall (D-CO)
Voinovich (R-OH)
Warner (D-VA)
Wicker (R-MS)
Not Voting - 6
Bennett (R-UT)
Bunning (R-KY)
Byrd (D-WV)
DeMint (R-SC)
Lugar (R-IN)
Vitter (R-LA)

Two Republicans, Richard Shelby of Alabama and Tom Coburn of Oklahoma, voted with 31 Democrats, including Senate Majority Leader Harry Reid of Nevada, in support of the provision. The author of the pending overall financial reform bill in the Senate, Banking Committee Chairman Christopher Dodd, voted against it. (See the full roll call.)

The amendment, sponsored by Sens. Sherrod Brown (D-Ohio) and Ted Kaufman (D-Del.), would have required megabanks to be broken down in size and capped so that their individual failure would not bring down the entire system.

Under Brown-Kaufman, no bank could hold more than 10 percent of the total amount of insured deposits, and a limit would have been placed on liabilities of a single bank to two percent of GDP.

In practice, the amendment required the six biggest banks -- Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley -- to significantly scale down their size. It was touted as a way to end Too Big To Fail.

Though top Obama administration officials have not publicly opposed the amendment, its leading economists have opposed ending Too Big To Fail simply by breaking up the nation's financial behemoths. Austan Goolsbee and Larry Summers have both fought back against this idea, as has Treasury Secretary Timothy Geithner.