Welcome login | signup
Language en es fr
We are the 99 percent

Articles tagged congress

Congress: Still Corporate. Still Criminal. Still Captured.

Posted 11 years ago on May 7, 2013, 7:46 p.m. EST by OccupyWallSt
Tags: congress, Wall Street, occupy the sec, HR 992

Congress: Still Corporate. Still Criminal. Still Captured.

One of the points Occupy Wall Street made, by choosing to occupy space in Manhattan and not in DC, was that it's really Wall Street who runs things, not the government.

The votes in the House Financial Services Committee today underscore that point with stark clarity.

Today the Committee considered a slew of bills that tear down many of the Wall Street reforms passed in 2010. These reforms were already imperfect, as Wall Street sent the full force of its lobbying to the Hill in 2010 to compromise these reforms as much as possible.

Wall Street, having succeeded in 2010 in watering down the reforms meant to regulate them two years after they ruined the economy, did not rest. They have been lobbying nonstop since then to do everything they could to gut these reforms even more.

Today, nine deregulatory bills were considered, and nine were passed. The most egregious, HR 992, which we wrote about on Monday, passed 53-6. This bill is named "Swaps Regulatory Improvement Act", but it should be called, "If Banks Get Bailed Out, We'll Get Sold Out. Again." This is the bill that makes the cost of doing business for Wall Street lower by exploiting the implicit backing of the Federal Government. It allows banks to hold risky derivatives in the insured depository--that part of the bank that is insured by the FDIC. As we wrote yesterday, this is dangerous because derivatives are senior in bankruptcy--derivatives counterparties get paid out first.

Only six members of Congress, out of sixty-one total committee members, decided that this risk was too much. That Wall Street has won enough fights. Six out of sixty-one. The only six who dared to not roll over for Wall Street are: Rep Maxine Waters (@MaxineWaters) (D-CA), Rep Keith Ellison (@keithellison) (D-MN), Rep Steven Lynch (@RepStephenLynch) (D-MA), Rep Velazquez (@NydiaVelazquez) (D-NY), Rep Mike Capuano (@mikecapuano) (D-MA), and Rep Al Green (@RepAlGreen) (D-TX).

Those six were decidedly in the minority. Fifty-three members of Congress decided that, no, we really ought to make life even easier for the megabanks. The megabanks have it so hard, after all, right?

The banks have laundered money for drug cartels. They have deliberately lied to regulators. They have lied to Congress. They have illegally foreclosed on homes and then had their captured regulator give wronged parties a slap-in-the-face settlement of $300. They have manipulated global interest rates. They have sold predatory loans disproportionately to people of color . They have been bailed out. And they will not lay low.

Fifty-three members of the Financial Services Committee today decided that all this malfeasance, corruption and criminal activity is not only fine, but it should be rewarded. We should make life even easier for them. We should lower their cost of doing business on the backs of the US taxpayer. Only six decided that no, enough is enough.

It is the same old song in Congress. Wall Street owns them, and no amount of disgrace, shame, corruption and crime will deter the fifty-three members of this Committee from pledging allegiance to Wall Street.

Here is the complete list of the Financial Services Committee members. The official twitter for the Republicans on the Committee is @FinancialCmte, and the twitter for the Democrats is @FSCDems. Wall Street still runs things, but it is worth letting our captured Congressmembers know that we are fully aware that Wall Street also owns them.


Wall Street Still Runs The Show

Posted 11 years ago on May 6, 2013, 1:01 p.m. EST by OccupyWallSt
Tags: get capitalism out of politics, congress

Instagram photo posted by Mortgage Bankers Association lobbyist Len Wolfson during their fundraising ski trip with Rep Jeb Hensarling.

Instagram photo posted by Mortgage Bankers Association lobbyist Len Wolfson during their fundraising ski trip with Rep Jeb Hensarling (R-TX) -- Memify this!

One might think that with the wave of scandals that have rocked the banking industry in the last several months, from HSBC money laundering to drug cartels, to the lies perpetuated in the JP Morgan London Whale trades, that politicians might have some sense of shame about continuing to deregulate on behalf of the banks. One might think that even if they are captured completely by their true bosses--Wall Street--that politically, they would have enough sense to go easy, lay low, and not carry the water for the banks so soon after this deluge of scandals.

You'd be wrong.

This Tuesday, the House Financial Services Committee will be reviewing nine bills that gut many of the reforms passed to regulate derivatives on Wall St in 2010. These bills vary in the specifics of their aims, but all effectively make profits easier for Wall Street, often at the expense of the American public.

As Mike Konzcal wrote for the Washington Post, “One bill would weaken cross-border regulations, allowing U.S. firms that run their derivatives in other countries to avoid following the new derivative rules. Another would exempt inter-affiliate swaps, or derivatives between various corporate entities, from having to follow the new Dodd-Frank derivative rules.”

But by far the most egregious of these bills is HR 992. Currently, banks can hold three kinds of derivatives in the same accounts as depositor funds--those that enjoy FDIC insurance. HR 992 would expand this to allow banks to hold ANY kind of derivative, with one exception (a structured swap, which is defined in the bill), in the insured depository.

The reason this is a problem is because derivatives are senior in bankruptcy. In the event a big bank went under, hedge funds sitting on the other side of trades with the bank would get money paid back to them first. If the hedge funds and other companies the bank traded derivatives with (what is technically called a “counterparty”) exhausted the funds set aside to insure the regular depositors (those with checking and savings accounts), the FDIC would have to 1) sell assets from the failed bank to raise money, and 2) try and fight to get back some of this money from the derivatives counterparties. If that didn’t work, the Treasury would step in and give a loan to the failed bank for 5 years--which essentially is a bailout. Banks want to hold their derivatives in the insured account because it makes it cheaper for them. HR 992 at its heart is about making the cost of doing business cheaper for Wall Street at the expense of Main Street.

These bills will most likely pass the Republican-controlled House Financial Services Committee. They will likely garner support from every Republican on the committee. Republican Randy Hultgren will certainly vote for his bill, HR 992 mentioned above. The head of the committee, Jeb Hensarling (known for a lavish ski vacation with Wall Street lobbyists). Another Republican, Scott Garrett, is also stuffed full of Wall Street cash, and will be sure to show his support for the banking lobby on Tuesday.

But there are also many Democrats who will likely vote for these bills. Jim Himes of CT (@jahimes) is a co-sponsor of one of the dangerous HR 992. David Scott of GA (@repdavidscott) is another co-sponsor, and he will also show allegiance to Wall Street on Tuesday. Carolyn Maloney of New York (@RepMaloney), will also likely vote on behalf of the banks, as she has proven a long-time ally of Wall Street.

Despite the fact that the ongoing wave of banking scandals demonstrate that the megabanks willfully violate existing laws, politicians on both sides of the aisle remain ready and willing to march ahead on their behalf, tearing down even the meager protections put in place after the financial crisis.

The bipartisan support for these bills shows that Wall Street still runs the show. And it also shows that even in the wave of revelations of money laundering by banks to drug cartels, politicians are still willing to risk populist rage in order to demonstrate where their ultimate allegiance lies. The banks remain so powerful, that Democrats and Republicans alike are willing to risk their re-elections rather than stand up to the criminals on Wall Street who give them their marching orders.