The U.S. House has voted for legislation that is described as “financial services reform.” But most of the “reforms” are so mild that the savviest of the nation’s big bankers will be breathing sighs of relief, rather than worrying about being regulated into good behavior.
That’s not to say that the House bill is meaningless. It proposes some valuable shifts, including the creation of a Consumer Financial Protection Agency that could — if infused with proper authority and backed by a White House and a Congress that want to tip the regulatory balance in favor of the great mass of Americans — give bankers and speculators some headaches. Unfortunately, that’s a vague promise rather than a firm one.
The problem is that the details are so sketchy that bank and insurance company lobbyists have plenty of openings to game the system in their favor. In other words, while there were those who claim that the House has enacted “the biggest change in oversight of Wall Street since the Great Depression,” the big banks aren’t going to lose any sleep over these so-called reforms.
Why is the House bill so disappointing? Of course, Republican opposition was a factor. But the biggest frustration was the Democratic block that tried, at every turn, to defend the big banks and speculators.
The worst player was Idaho Democrat Walter Minnick, who tried to gut consumer protections in the House legislation by blocking creation of a potentially powerful Consumer Financial Protection Agency. The key vote on financial services reform in the House was on the Minnick amendment.
One hundred and seventy five Republicans voted for the Minnick amendment, while none opposed it. No surprise there; while the Republican Party once was in the forefront of advancing consumer protections and smart business reforms, it is now merely a “Party of No.” Joining the Republican backers of the move to gut the consumer protections were 33 Democrats. Most were southern and western “Blue Dogs,” whose philosophy might best be described as “Even a little reform is too much if it makes the bankers unhappy.”
They needn’t worry too much. While the House has acted, America is still a long way from even a little reform.
– John Nichols is Washington correspondent for The Nation magazine.
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