The long awaited House-Senate Financial Reform Conference Committee got underway this week. Thanks to the efforts of Public Citizen, Campaign for America's Future, CMD and others, these committee meetings will be live on C-Span 3, and all amendments will be made available in advance. At BanksterUSA we are working hard to make sure that the strong derivatives language currently in the Senate version of the bill is not weakened (Sec. 716 authored by Senator Blanche Lincoln, D-Arkansas). We are keeping a whip count on the conferees and we could use your help! A whip count helps us pool intelligence on what the members are saying to their constituents. If you make a call you can post a comment to our whip list letting us know what you heard. It is grassroots activism at its best.
To the surprise of many, Blanche Lincoln won her Arkansas Senate runoff. She did so as a modern-day William Jennings Bryan standing up for farmers and pushing a strong Wall Street reform proposal to help farmers and protect taxpayers. It is worth reviewing the promises made on the campaign trail and the lessons the race holds for candidates in 2010. In a conservative state, Lincoln ran hard on her record as Agriculture Committee chair, her critical health care vote and on her strong proposal to crack down on Wall Street derivatives trading. "I am Blanche Lincoln and I grew up in an Arkansas family where I was taught to solve problems ... that's why I cast the deciding vote to pass health care reform ... And it's why I am taking on Wall Street with the toughest reform bill of anyone in either party ... and it's going to pass," she reassures with a nod. This is a winning message in a tight race.
Reckless swaps and derivatives trading played a critical role in the financial crisis, inflating the domestic housing bubble and turning it into a global economic catastrophe. As the House and Senate conference committee begins final work on the financial services reform bill, it is critically important that we wall off the casino from the taxpayer guarantee. If big banks want to gamble they need to do so with their own money. Nobel prize-winning economist Joseph Stiglitz makes the case for strong provisions in the Senate derivatives chapter plainly: "If [Congress] fails to pass strict oversight of dangerous over-the-counter derivatives and swaps the U.S. economy will continue to be vulnerable to significant financial risk."
To urge the House and Senate conferees to take action visit BanksterUSA.
When the Senate bank reform legislation passed in May, Senate Majority Leader Harry Reid (D-Nevada) said it sent the message to Wall Street that they can no longer "recklessly gamble away other people's money." The bill told Main Street, "you no longer have to fear that your savings, your retirement or your home are at the mercy of greedy gamblers in big banks. And it says to them, 'never again will you be asked to bail out those big banks when they lose their risky bets,' " according to Reid.
Reid was correct. The bill the Senate passed did protect the taxpayers from reckless gambling by the big banks, largely due to the last-minute inclusion of strong derivatives reforms authored by Senator Blanche Lincoln (D-Arkansas). So why is it that Senate and House leadership are now busy behind these scenes trying to kill the best provisions in their own banking reform legislation?
Even though the bank reform bill working its way through Congress is far from perfect, there are some strong provisions well worth fighting for as the bill moves to a House-Senate conference committee.
Two recent articles illustrate the pros and cons of this behemoth bill. New York Times reporter Gretchen Morgenson, does a great job reminding us that the original Glass-Steagall legislation was only 34 pages long and it was key to keeping our financial system stable for 60 years. She points out that the two bills that the Senate and the House have now passed are a whopping 3,000 pages combined:
Yet despite all that verbiage, there are flaws in both bills that would let Wall Street continue devising financial black boxes that have the potential to go nuclear. And even if the best of both bills becomes law, investors, taxpayers and the economy will remain vulnerable to banking crises.
According to a story in the Washington Post by Mike Konczal, the Big Banks have just created an astroturf or cashroots group called the "Consumers Against Retail Discrimination Alliance" to fight a provision of the financial reform bill: This nominal "consumers" group is constituted of really, really big "consumers," according to Konczal, including "Visa, MasterCard, Bank of America, JP Morgan Chase, U.S. Bank, Citi" and almost every banking association that is part of the more accurately named "Electronic Payments Coalition." They have attempted to label this a corporate "civil rights" issue by talking about "discrimination" -- or "retail discrimination," that is.
A special report for the Center for Media and Democracy by Glen Frost, Editor of The PR Report: "Class action against banks ensures 'access to justice' says Australian Minister"
According to the organizers, it's Australia's largest class action lawsuit: a case of disgruntled bank customers versus the big banks.
Financial Redress, a specialist in recovering compensation from financial institutions for excessive charges or mis-selling, and a subsidiary of litigation funder IMF Australia, is launching a class action against a number of Australian and foreign banks (with operations in Australia) who have allegedly overcharged customers for years.
The fees in question are honour and dishonour fees on overdrawn bank accounts and over-limit and late payment fees on credit cards. Financial Redress refers to these as "exception fees" and alleges that the banks have been charging customers an "unfair" amount. Customers are both individuals and businesses.
At the end of last week, the U.S. Senate passed a financial reform bill that was far stronger than what had been proposed by the Obama administration and passed by the House. Now it's time to hold President Obama's feet to the fire to ensure the strongest possible bill.
UPDATE ON THE BANKING FRONT: The only thing with teeth left in the Dodd financial reform bill -- provisions introduced by Arkansas Senator Blanche Lincoln that would force the biggest banks to spin off their swaps (or derivatives) desks into separate entities -- may be taken out without even getting a vote. It may be stripped out via a Dodd "manager's amendment," which is being created privately in negotiations with Senators. A manager's amendment is a package of numerous individual amendments agreed to by both sides in advance.
Right now is an important moment to call Senator Lincoln's office and tell her to defend her original language to end federal and taxpayer backing for reckless Wall Street gambling. You can reach her office at (202) 224-4843.
Last year, right-wing activists masqueraded as a pimp and a prostitute and used a phony storyline and a hidden camera to take down the community group ACORN. ACORN was eventually absolved and the unsavory tactics of the right exposed, but that hasn't stopped the right from moving on to a new target: the Berkeley, California-based Greenlining Institute. Like ACORN, the Greenlining Institute is a progressive organization that advocates for the poor and works for economic justice. It also supports implementation and enforcement of the Community Reinvestment Act, a federal law passed in 1977 to mitigate deteriorating conditions in low and moderate-income neighborhoods by addressing the practice of redlining -- denying credit or insurance to people based on their ethnic background or neighborhood. Groups like ACORN and the Greenlining Institute draw the wrath of wealthy corporate interests because they seek government regulation of lucrative but abusive or harmful business practices.