Bills That Would Gut Wall Street Reform Overwhelmingly Pass House Committee

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On Tuesday, three bills that would gut the 2010 Dodd-Frank Wall Street reform bill passed the House Financial Services Committee (HFSC) in decisive fashion, with just six members of the 61-member committee voting against all of them.

The three bills passed over serious objections from the Obama administration. On Monday, Treasury Secretary Jack Lew wrote a letter to Rep. Jeb Hensarling (R-Texas), the chairman of the committee, urging “members to oppose these bills and others like [them] that would weaken the important regulatory changes that Wall Street Reform has made to the derivatives market.” A year ago, former Treasury Secretary Timothy Geithner made a similar statement against a slate of nearly identical bills.

Financial reform advocates say that the three bills would do serious damage to parts of Dodd-Frank that deal with derivatives, which are financial products with values based on underlying numbers, like crop prices or interest rates.

Only six of the 28 Democrats on the committee voted against all three of the bills—Reps. Maxine Waters (D-Calif.), the senior Democratic member of the committee; Nydia Velázquez (D-N.Y.); Mike Capuano (D-Mass.); Stephen Lynch (D-Mass.); Al Green (D-Tex.); and Keith Ellison (D-Minn.). Another six Democrats voted against some of the bills. Sixteen Dems voted in favor of all three bills. Thirty-one of the 33 Republicans on the committee voted for all the bills; Reps. Steve Pearce (R-N.M.) and Lynn Westmoreland (R-Ga.) abstained on two of the bills.

House Financial Services Committee members received some $14.8 million in contributions from the financial services and banking sectors during the last election cycle.

One of the offending bills would allow certain derivatives that are traded within a corporation to be exempt from almost all new Dodd-Frank regulations. The second would expand the types of trading risks that banks can take on. The third would allow big US-based multinational banks to escape US regulations by operating through international subsidiaries. Financial reform advocates say it is way too early to start messing with Wall Street reform, especially since key parts of Dodd-Frank have yet to go into effect.

In an opening statement before the vote, Waters listed a series of financial scandals in the wake of the 2007 crisis that she argues make strong financial regulations imperative. “These scandals include, but aren’t limited to, money laundering to drug cartels, Libor [interest rate] manipulation, and the case of the ‘London Whale,'” the nick-name for JPMorgan’s massive trading loss last year, she said.

The bills will now head to the House floor for consideration, and have a good chance of being taken up in the Senate.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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