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Senate Bill Contains a Gift for Big Banks
Despite bipartisan consensus on Capitol Hill that the size and interconnectedness of major financial institutions poses a grave risk to the system as a whole, Senate banking reform legislation includes a provision that will help them get even bigger.
The provision -- long desired by the big banks -- would allow them to open new branches in states regardless of local laws. This is known as de novo branching. The provision was first put forward by the Treasury Department in the financial regulation reform bill that it sent to Congress.
House Financial Services Committee Chairman Barney Frank (D-Mass.) initially included the provision in his bill, but removed it after a Democratic committee member, Rep. Alan Grayson of Florida, asked that it be taken out.
Florida doesn't allow de novo branching and its local banks are vocal opponents of changing the law. They went to Grayson, and Grayson took their concerns to Frank, who said he had no problem removing it.
Frank told HuffPost that Treasury didn't object to his removal of their provision.
"I don't get much from pushback from Treasury," Frank said. "They need me. I don't need them."
The lobby representing small banks -- the Independent Community Bankers Association -- was glad to see the gift to big banks taken back, Steve Verdier, an ICBA senior vice president, told HuffPost.
But weeks later, when Senate Banking Chairman Chris Dodd unveiled his new financial reform package, the de novo language popped up again -- a verbatim copy of the Treasury language.
That had observers scratching their heads at the resilience of the language.The conformity to Treasury's wording was no coincidence. "That was just something we pulled straight from the administration's proposal," Kirstin Brost, a spokesman for Dodd's banking committee, told HuffPost.
Now that community banks are expressing concern, the provision will get a fresh look, she said, emphasizing that Dodd's bill is a discussion draft only.
Treasury, however, still wants it. "This eliminates a difference between thrifts and banks. While banks are subject to these limits, thrifts are not," said Treasury spokeswoman Meg Reilly. "Although we are proposing to eliminate the thrift charter, this is an important step towards increased competition in banking and will reduce costs for consumers."
The little banks don't see it that way. "ICBA opposes this part of the bill; we'd prefer to let the states handle this issue, as they have for years," said Verdier.
15 Comments so far
Show AllDodd? Purchased cheaply.
Nader should be able to crush Dodd next year should he run.
"Treasury, however, still wants it. 'This eliminates a difference between thrifts and banks. While banks are subject to these limits, thrifts are not,' said Treasury spokeswoman Meg Reilly. 'Although we are proposing to eliminate the thrift charter, this is an important step towards increased competition in banking and will reduce costs for consumers.'"
It doesn't take much in the way of intelligence to figure out that eliminating thrifts will reduce competition for financial services, not increase it. Banksters have been trying to destroy credit unions for decades.
q
During the 2008 campaign Obama and the Democratic Party-controlled Congress were being compared to FDR and his 1933 New Deal. Regulating the size and scope of banks was the keystone of the New Deal.
Obama and Congress' pandering to banks has made 2009 look like Herbert Hoover's 1929, not FDR's 1933.
Had Hoover beat FDR in 1932 the US would have joined the list of nations falling to fascism in the 1930s (Germany, Italy and Spain for example). FDR's New Deal stalled fascism in the US until Ronny Raygun's assault on Democracy in 1981.
"Banksters have been trying to destroy credit unions for decades."
That's right, and Dodd's little gift might be just what they need for that coup.
"de novo" eh? Quick everyone put your money in a credit union, or cash out and buy silver or bottles of beer.
There is about to be another banking bust,
Just one gift for the banks in the bill? Are our representatives are slipping? Something tells me if you you look closely at it you might find more.
GET DODD OUT OF OFFICE AND THAT IS ONE PROBLEM TO HAVE TO DEAL WITH....... RUN RALPH RUN!!!
If this garbage passes then be happy as I don't know of better way of not making it work because it seems so easy and simple to just don't use these new jpmorgans, chase, citi branches, let them sit and remain empty, but it may be something that is just too easy and simple for people to stay away from them.
Whatever happened to State's rights?
It's also been rumored, or known, that in Healthcare Reform, state insurance regulations are being overridden by Federal fiat. It is nothing more than a Federal-mandated race-to-the-bottom, where the State with the least controls on the arivace of corporations wins.
Congressional members = shills for big banks, big business
A SHILL IS A MOUTH PIECE. these are PAID REPRESENTATIVES!
major difference.barney frank was at one point a tough
representative of the people now that he is chairman
of his committe he is the tough representative of the
banks! barney has taken in a very nice sized pile
of cash in bribery er i mean campaign contributions
(excuse me for being so gauche) in the last 2 years.
its a shame because when the repugs were in power
barney was the go to guy to come out and kick some
ass when they really got off the hook now he's
the guy to come out and kick some public ass when
the public presses him on illegal banking
activities! BARNEY WTF HAPPENED? i really admired
him back in the late 80's when he first got elected
and was one tough tough straight shooter then!
the truth of it is is that absolute power does
indeed corrupt!
Instead of investing in saving the RACKET banks, how about investing to make the drug or medicine the following CTV report is about available to all cancer patients?
"VIDEO: New Cheap and Effective Cancer Drug: But Big Pharma Says NO WAY!
Will Dr. Evangelos Michelakis' Invention be blocked by a Profit Driven Pharmaceutical Industry?"
by CTV, ctv.ca, Nov 28, 2009
http://www.globalresearch.ca/index.php?context=va&aid=16320
I just posted a full copy of the article and a link to the Youtube video for the following article, for readers who prefer to use this posting and the direct YT video.
http://www.commondreams.org/headline/2009/11/30-3#comment-1354871
Holding up Bigger Bankers? It's easier to hold up the sky. Let the dominos fall. -Atlas
Maybe it will be like a game of Monopoly. When one of the players gets all the money, the game is over. But in another sense, if the people want to play the game again, all of the money that the one player has is redistributed equally to each of the players. This redistribution should probably be called a revolution. The banks should be careful not to acquire all of the money.