Senate Bill Contains A Gift For Big Banks

[Joanne98]

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.

Story continues below

http://www.huffingtonpost.com/2009/11/30/senate-bill-contains-a-gi_n_373962.html

[mbperrin]

1. A gift for the well connected? What a shock!

Actually, if they don't include a provision allowing them to barbecue my children when I'm five minutes late with a payment, I'll consider it a victory.

[endless october]

2. TBTF, too big to exist.

a good rule of thumb. who can i cast a vote for to make that happen?

[Moosepoop]

3. Do we have anyone in the Senate who might object to this?

Grayson asked Frank to remove it from his bill, and Frank did. Is there anyone in the Senate who might ask the same of Dodd, and is there any chance of Dodd removing it like Frank did?

[dixiegrrrrl]

4. Never forget this about Chris Dodd:

Senator Chris Dodd, Democrat of Connecticut and Chairman of the Senate Banking Committee, has received $752,698 in contributions from the financial sector. He's received more from the mortgage banking and brokerage industry than any other congressperson, and Citigroup, AIG, Merrill Lynch, Goldman Sachs, Credit Suisse, and Morgan Stanley have been among his biggest donors.

SourceWatch, as quoted on HuffPo...
http://www.huffingtonpost.com/2009/11/17/the-15-biggest-congressio_n_360514.html?ref=patrick.net&slidenumber=9tx4JqHolnk%3D#slide_image