big banks

(EDITOR’S NOTE, 2:20 AM ET, 5/26/18: This article originally sourced tweets from progressive nonprofit Public Citizen containing donations to supporters of the bill. Public Citizen’s tweets have since been deleted. We have since updated this article with the names of the 33 Democrats who voted for the bill, along with their campaign donations from commercial banks.) 

The Republican-controlled U.S. House of Representatives just voted to roll back financial regulations put in place following the 2008 financial crisis. 33 Democrats captive to big banks’ political donations helped.

As the Los Angeles Times’ David Dayen explained, the bill — named the “Economic Growth, Regulatory Relief, and Consumer Protection Act,” or, more simply, S.2155 — would roll back numerous consumer protections the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) put in place after various big banks failed a decade ago, requiring bailouts from taxpayers to keep them afloat.

Among some of the provisions of the bill include lowering the amount of reserves banks need to keep on hand in the event of a financial crisis and resulting withdrawals of assets from panicking customers, protections put in place to cut down on banks discriminating against customers applying for mortgages, and allowing banks to recategorize roughly $3.8 trillion in municipal bonds as “highly liquid assets,” while repealing several other important financial protections:

Stress tests currently conducted semi-annually to measure how big banks would perform in a downturn will now occur on a “periodic” basis, with no definition of “periodic” given. Citigroup and JPMorgan could take advantage of a relaxation of leverage rules, enabling them to take on more debt and ramp up risk… There are a few crumbs for consumers, but nothing that justifies the widespread weakening of financial rules.

The vote comes just months after an International Monetary Fund economist published a study showing that nearly every major financial collapse in both Europe and the United States, dating back to the 18th century, came after governments loosened regulations on the financial sector. The includes devastating financial meltdowns like the Panic of 1825 in Great Britain, all the way up to the subprime mortgage bubble’s burst in the late 2000s in the U.S.

“Financial booms, and risk-taking during these episodes, were often amplified by political regulatory stimuli, credit subsidies, and an increasing light-touch approach to financial supervision,” the study’s summary read. “Post-crisis regulations do not always survive the following boom… History suggests that politics can be the undoing of macro-prudential regulations.”

Republicans’ typical argument against regulations on businesses is that it cripples their ability to make a profit. However, according to data from the Federal Deposit Insurance Company (FDIC), banks are making record profits even with the current regulations in place. Banks made a quarterly net income of $56 billion in the first quarter of 2018, outpacing the last record of $48.1 billion set in the second quarter of 2017:

big banks

While it’s no surprise that Republicans — most of whom remained staunchly opposed to regulating big banks even in the immediate aftermath of the financial crisis — sponsored S.2155 and voted for it in both the Senate and the House, Democrats’ support of financial deregulation is surprising. However, the “yea” votes of those 33 House Democrats is less surprising when considering the amount of money they’ve received from big banks over the course of their careers.

Here are the names of all 33 Democrats who supported the bill. Significant career campaign donations from the commercial banking industry, using campaign finance records from the Center for Responsive Politics, are listed below:

Rep. Ami Bera (D-California)

Rep. Sanford Bishop (D-Georgia)

-Donations from commercial banks: $295,150 (since 1998)

Rep. Lisa Blunt Rochester (D-Delaware)

-Donations from commercial banks: $31,035 (since 2018)

Rep. Andre Carson (D-Indiana)

Rep. Lou Correa (D-California)

Rep. Jim Costa (D-California)

-Donations from commercial banks: $149,200 (since 2003)

Rep. Henry Cuellar (D-Texas)

-Donations from commercial banks: $327,580 (since 2001)

Rep. Danny Davis (D-Illinois)

Rep. John Delaney (D-Maryland)

-Donations from commercial banks: $276,600 (since 2011)

Rep. Bill Foster (D-Illinois)

-Donations from commercial banks: $189,395 (since 2007)

Rep. Vicente Gonzalez (D-Texas)

-Donations from commercial banks: $15,500 (since 2017)

Rep. Josh Gottheimer (D-New Jersey)

-Donations from commercial banks: $51,250 (since 2017)

Rep. Alcee Hastings (D-Florida)

Rep. Jim Himes (D-Connecticut)

-Donations from commercial banks: $588,250 (since 2007)

Rep. Ron Kind (D-Wisconsin)

-Donations from commercial banks: $232,668 (since 1995)

Rep. Ann Kuster (D-New Hampshire)

Rep. Rick Larsen (D-Washington state)

Rep. Al Lawson (D-Florida)

Rep. Sean Maloney (D-New York)

-Donations from commercial banks: $192,370 (since 2011)

Rep. Stephanie Murphy (D-Florida)

-Donations from commercial banks: $24,015 (since 2017)

Rep. Rick Nolan (D-Minnesota)

Rep. Tom O’Halleran (D-Arizona)

Rep. Scott Peters (D-California)

Rep. Collin Peterson (D-Minnesota)

-Donations from commercial banks: $209,240 (since 1989)

Rep. Kathleen Rice (D-New York)

-Donations from commercial banks: $77,206 (since 2013)

Rep. Bradley Schneider (D-Illinois)

Rep. Kurt Schrader (D-Oregon)

Rep. David Scott (D-Georgia)

-Donations from commercial banks: $560,701 (since 2001)

Rep. Terri Sewell (D-Alabama)

-Donations from commercial banks: $315,400 (since 2009)

Rep. Kyrsten Sinema (D-Arizona)

-Donations from commercial banks: $259,548 (since 2011)

Rep. Tom Suozzi (D-New York)

Rep. Marc Veasey (D-Texas)

-Donations from commercial banks: $58,250 (since 2011)

Rep. Filemon Vela (D-Texas)

-Donations from commercial banks: $58,735 (since 2011)

When the bill came up for a vote in the Senate in March, it won the support of 17 Senate Democrats — including high-profile Democrats like Senator Tim Kaine (D-Virginia), who was Hillary Clinton’s running mate in the 2016 presidential election. Several others up for re-election this year, like Sens. Joe Donnelly (R-Indiana), Heidi Heitkamp (D-North Dakota), Joe Manchin (D-West Virginia), Claire McCaskill (D-Missouri), Bill Nelson (D-Florida), Debbie Stabenow (D-Michigan), and Jon Tester (D-Montana) also voted in favor of S.2155.

S.2155 now heads to to the desk of President Trump, who is expected to sign it despite his statement on the campaign trail in 2016 that the big banks “caused tremendous problems for us.

 

Carl Gibson is co-publisher of Grit Post. His work has previously been published in The Guardian, The Washington Post, The Houston Chronicle, Al-Jazeera America, and NPR, among others. Follow him on Twitter @crgibs or send him an email at carl at gritpost dot com.

Comments

  1. But they can’t live decently on the salary they get. Think about how long the average individual has to work to make that much money

      1. “Republicans backed by big banks vote for Republican-sponsored bill to deregulate big banks” is not news. “33 members of party that passed financial regulation 8 years ago vote to undo financial regulations” is news.

        Grit Post regularly holds both Democrats and Republicans accountable, and our editorial team always seeks to report the news while simultaneously poking holes in false narratives, particularly that we should align ourselves behind either team red or team blue regardless of policy. Politics is dynamic, nuanced, multifaceted, and complex, and we’ll always strive to reflect that in our content.

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