The House of Representatives voted on Tuesday to roll back key provisions of the landmark Dodd/Frank Wall Street Reform and Consumer Protection Act, a 2010 law that increased regulatory scrutiny of banks following the 2008 financial crisis.
One of the many provisions of the original Dodd/Frank law subjected banks with over $50 billion in assets to annual economic “stress tests” to gauge their potential for collapse in the event of an economic crisis. The rollback bill raises that threshold to $250 billion, which would exempt at least two dozen “small” banks, including SunTrust, BB&T, Charles Schwab and American Express. By comparison, in 2008, key failed bank Countryside had only $172 billion in assets, and so would have avoided stress testing, while other financial dominos like Washington Mutual ($264 billion) and Bear Stearns ($289 billion) were close to the lower limit.
The Dodd/Frank rollback also relaxes banks’ reporting requirements on borrowers, and adds exemptions for banks with less than $10 billion in assets from the Volcker Rule, a Dodd/Frank provision that bars banks from investing deposits in risky private equity and hedge funds.
The Senate version of the bill was approved back in March, with 16 Democrats voting for the rollback of provisions: senators Michael Bennet, Tom Carper, Chris Coons, Joe Donnelly, Maggie Hassan, Heidi Heitkamp, Doug Jones, Tim Kaine, Joe Manchin, Claire McCaskill, Bill Nelson, Gary Peters, Jeneane Shaheen, Debbie Stabenow, Jon Tester and Mark Warner, along with independent Angus King. The House version passed with the support of 33 Democrats. The bill is now headed to President Trump’s desk and will surely be signed into law. The Dodd/Frank rollback comes just as banks are reeling in record high profits.
While some criticized the Democrats who took the side of the banks, they could point in their defense to a seemingly authoritative source: former Democratic Rep. Barney Frank of Massachusetts, one-half of Dodd/Frank’s namesake and its chief sponsor in the House. Frank weighed in on the rollback in an interview with CNBC (5/22/18), saying that “It does not in any way weaken the regulations we put in there for the largest banks or that were there to prevent the kind of crisis we had ten years ago,” and noting that the rollback “is not a big number on the bill. It’s a small number.”
What CNBC does not cite is Frank’s role as a member of the board of Signature Bank, a New York–based institution that held $43 billion in assets at the end of 2017. Signature Bank has been growing rapidly in recent years, increasing its assets by 10 percent since December 2016. Signature benefits directly from the Dodd/Frank rollback, as the bank was approaching the $50 billion stress test threshold. While Frank also maintains he would have voted “No” on the rollback if he were still in Congress, he suggested a $125 billion threshold instead, which would still give Signature room to more than double in size.
Signature Bank gave over $50,000 in campaign donations during the current election cycle to Democratic senators Joe Donnelly and Heidi Heitkamp, two key votes for the Dodd/Frank rollback bill. Also notable is that Ivanka Trump was a board member at Signature Bank from 2012–13, and the bank has also extended loans to both Donald Trump and her husband Jared Kushner. During her 18 months on the board, Ivanka Trump earned $40,000 in cash and $160,000 worth of shares. Since joining the board in 2015, Frank has netted over $1 million dollars (Washington Post, 5/24/18).
Washington Post reporter Jeff Stein (Twitter, 5/22/18) noted that Frank’s role as a Signature board member was conspicuously absent when reporters quoted him assuring that “the rules to prevent [banks] from getting into trouble will still be there” (New York Times (11/27/17), that “the upsides as well as the downsides of the proposed rewrites have been exaggerated” (Politico, 3/17/18) and that “people who say it’s a rollback are wrong” (CNBC, 3/16/18). Other outlets that left out Frank’s role as a bank board member while quoting him downplaying the magnitude of the rollback were the Washington Post (5/22/18), CBS News (5/23/18), NPR (5/22/18), Quartz (5/23/18) and the San Francisco Chronicle (5/22/18).
While some publications, like Vox (5/23/18) and AP (5/2/18), noted Frank’s involvement on the Signature Bank board, the lack of disclosure of his conflict of interest by some of the country’s largest publications is striking. It isn’t like Frank’s board membership is a secret, either; it’s literally in the first sentence of his Wikipedia page.
I have lost count of the sell-out Democrats. They are so great in number.
Third Party!
I have lost count of the sell-out Democrats. They are so great in number.
Third Party!
This is not surprising. He spoke out against Bernie Sanders and that’s when I knew Frank was a sellout to corporate interests. What a hypocrite!
This is not surprising. He spoke out against Bernie Sanders and that’s when I knew Frank was a sellout to corporate interests. What a hypocrite!
Money and politics…sigh, The Supreme Court at one point said, money is speech……wow, that means that 99% of we the Americans are struck mute I guess. As for Mr. Barney Frank—–I am renaming you as Barney SUSPECT—you dissed your own FRANK, Dodd bill! I wonder when the Constitution will be changed so that only white men with property can vote? America hoisting itself on its own petard. : (
Money and politics…sigh, The Supreme Court at one point said, money is speech……wow, that means that 99% of we the Americans are struck mute I guess. As for Mr. Barney Frank—–I am renaming you as Barney SUSPECT—you dissed your own FRANK, Dodd bill! I wonder when the Constitution will be changed so that only white men with property can vote? America hoisting itself on its own petard. : (
I said long ago, that reviewing the President[s] team of economic advisors from Clinton through Obama, was clear they were either the same or extensions of the previous group of people/interests…. Thus, omitting the lunacy of political party or politician favoritism, which is all we hear from corporate owned news (if news in the technical sense of informative value is what you want to call it) its become apparent that politicians from across the spectrum turn in their mindset and/or value as public service to that of corporate henchmen….
I worry, that as a country we are losing the essence of what makes our country the greatest country in the history of the world, “we the people fore the people……
I said long ago, that reviewing the President[s] team of economic advisors from Clinton through Obama, was clear they were either the same or extensions of the previous group of people/interests…. Thus, omitting the lunacy of political party or politician favoritism, which is all we hear from corporate owned news (if news in the technical sense of informative value is what you want to call it) its become apparent that politicians from across the spectrum turn in their mindset and/or value as public service to that of corporate henchmen….
I worry, that as a country we are losing the essence of what makes our country the greatest country in the history of the world, “we the people fore the people……
This is a clear example showcasing how ‘blue Dog Democrats’ undermine sound banking policy. In addition, the ethical and accurate reporting by FAIR shines a spotlight of damning evidence of two key votes from recently paid off Democrats, to prime the pump for the next economic disaster.
Funny how your attitude can change when you’re the one getting paid.
Funny how your attitude can change when you’re the one getting paid.
haha! OMFG! the dark farce continues in daily politics. The dodd-Frank bill was already quite weak without the reinstatement of Glass-Stegal, and the white collar criminals still in place at all the major banks, and more according to Matt Taibbi of Rolling Stone, but now it completely repealed and no protection for the average Joe or Jane and Barney Frank now a Fox guarding the henhouse says its ok because my bank who no one is going to disclose will profit from it, is just astonishing. Grant you this was the same waste of oxygen and space who on Real Time with Bill Maher defended Clinton despite her being a Bank friendly/Anti-LGBT candidate and slamming Bernie’s common sense reforms every chance he could get and when he defended Clinton giving speeches to Crooked Banks and getting paid handsomely he defended it because he participated in it. And when Bill Maher acted surprised and said “you give speeches to Wall Street and get paid?” Frank went “Well yeah they ask me to come because I’m an interesting guy and they want to hear what I have to say”. If the term windbag ever applied to anyone it’d be Barney FRank.