Senate Democrats who voted to roll back Dodd-Frank’s banking regulations are now enjoying a lofty boost in donations from the big banks that benefited.
In 2016, 8 of the top 10 recipients of banking industry money recipients were Republicans. This year, 8 of the top 10 are Democrats. Out of those eight Democrats, only one didn’t vote for the Dodd-Frank rollback: Sen. Sherrod Brown (D-Ohio) — the ranking member of the Senate Banking Committee.
S.2115, or the Economic Growth, Regulatory Relief, and Consumer Protection Act, was drafted with 12 Democratic co-sponsors in the Senate, and 16 Democrats ultimately voted with Senate Republicans to pass it. The bill was touted as offering relief to smaller community banks, who critics of Dodd-Frank said were being unfairly held to the same standard as big banks like Bank of America or Goldman Sachs.
One of the more controversial aspects of the bill, however, concerned the increased regulation of banks considered large enough to be systematically important financial institutions (or SIFAs). SIFAs were subject to increased regulation to prevent another financial crisis like the one that occurred in 2008 following the collapse of giant institutions such as Lehman Brothers and Merrill Lynch.
Dodd-Frank classified banks with assets over $50 billion as SIFAs, which then-Senator Barney Frank (D-Massachusetts) later called a “mistake,” wishing the threshold had been $125 billion. S.2115 jacked that threshold up to $215 billion.
“I don’t doubt that moderate Democrats, some of them at least, had motivations around policy goals and thought that components of the bank deregulation bill were good,” Lisa Gilbert, vice president of legislative affairs at the advocacy group Public Citizen, told Vox.com. “But from our perspective, it’s an attack on Dodd-Frank, and that’s something that the banking industry has wanted since the bill passed.”
The biggest recipients of donations from big banks this election cycle have been Senators Jon Tester (D-Montana), Heidi Heitkamp (D-North Dakota), Joe Donnelly (D-Indiana), and Claire McCaskill (D-Missouri), who along with Senator Dean Heller (D-Nevada) have thus far raked in $800,000.
“Any giving that we have is commensurate with their support for pro-community banking,” Aaron Stetter, executive vice president of policy and political operations of the ICBA, told Vox. “You do have to look at the legislation, and [the banking bill] definitely plays into our calculation of whether someone is pro-community bank or not.”
Spokespeople for Tester, McCaskill, Heitkamp, and Donnelly did not return request for comment or declined to comment for this story.
Nathan Wellman is a Grit Post contributing editor in Los Angeles. Follow him on Twitter: @LIGHTNINGWOW. You can also email him at info AT gritpost DOT com.
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