During a debate that did not begin until well into the evening, Congresswoman Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee, led House Democratic members in strong opposition to H.R. 37, a harmful package of 11 bills that will roll back certain portions of the Wall Street Reform Act.
The legislation contains harmful provisions that undermine Dodd-Frank, which was passed in response to the worst financial crisis in a generation. These include a newly introduced measure that provides an additional two-year delay for a type of risky financial instrument, collateralized loan obligations, from the Volcker Rule, a cornerstone of Dodd-Frank that prohibits large banks from gambling with taxpayer-backed funds. The measure pushes back the deadline for banks to divest CLOs until 2019, nearly a decade after Dodd-Frank was enacted. The package also contains a harmful provision that restricts the amount of information a private company must provide to an employee that receives compensation in the form of stock, which denies our nation’s workers the right to understand how much their compensation is worth – and the risks associated with it.
Waters made the following comments on the House Floor.
“Thank you, Mr. Chairman.
"If at first you don't succeed, try, try, again."
Usually we use that saying with children, to encourage them to achieve greater things.
But it seems that when it comes to Congress, it's what Wall Street keeps telling House Republicans.
Mr. Chairman, Republicans thought they could sneak this bill by last week through a fast-track process on the House floor: a process with limited debate and no opportunity for amendments. They thought they could ram through this gift to a handful of the biggest Wall Street banks on just the second day this new Congress had convened.
Well, the American people were watching, and the Democrats here in the House told them "no." The Republican bill failed.
But now, they are at it again.
And now, H.R. 37 - is back on the floor, again without the opportunity to amend it, and with limited debate. The only difference is that Republicans have reduced how many votes are needed to guarantee passage. That’s right, rather than fix the bill to win broad support, Republicans just changed the rule to make sure the tainted bill passes.
And what does this bill do?
Well, for one, it takes a part of Wall Street Reform's "Volcker Rule" and delays it for yet another two years. Remember that the Volcker Rule is the part of Dodd-Frank that stops government supported banks from gambling with bank depositors’ money.
And this extra two-year delay comes on top of a three year delay that our regulators carefully crafted to ease the mega banks’ transition.
This particular part of the law that Republicans want to see delayed applies to what is known as "collateralized loan obligations," or CLOs. CLOs are bundles of leveraged loans, loans often issued by private equity firms to facilitate corporate buyouts that can harm American jobs. The loans are sliced and diced into packages and sold off to investors, including banks that hold consumers’ deposits. And the packages often also contain credit default swaps or other derivatives that can make the position even riskier.
Somehow, Wall Street bankers - the supposedly smartest people in the room- can't seem to comply with a law passed in 2010 by – that's right, 2017. Seven long years isn't enough – Republicans and the banks want nearly a decade.
And in addition to that, the Republican bill wouldn’t just let the banks hold onto these CLOs, the bill would let the banks accumulate new CLOs, too. That’s right, the banks could actively trade in-and-out of these investments, unlike the rules carefully crafted by the Federal Reserve.
We saw the Republican play book at the end of last year with the so-called "swaps push-out" rule: they hope they can jam these bills through Congress by attaching them to "must-pass" legislation. And most of all, they hope these issues are too complicated or too technical for the American people to understand or care about.
But the American people do understand. They remember how our economy was nearly brought to its knees in 2008 and they recognize that we can't let Wall Street slowly chip away at reforms designed to prevent that kind of large-scale financial crisis from happening again.
And President Obama gets it, too. That's why the White House said he would veto this legislation if it got to his desk.
What's worse is that this legislation has been brought to the floor without regard for regular order. The nine new members on the Financial Services Committee will not get a chance to hear testimony on it at all.
And in just the second week of their term, 52 new members of the House are expected to vote on it, having complicated deregulation shoved down their throats. Democrats offered 13 amendments, one of them bipartisan, but none of these amendments will be considered or debated. Why? Because my colleagues on the other side are not interested in legislating, but rather in political theater.
We cannot let this casual disregard for the legislative process stand.
We want to see reforms sensibly implemented. We want to work with regulators to get the rules right. And we want our largest banks to stop gambling, and go back to facilitating growth in the real economy.
But that's difficult to do when my Republican counterparts continue pushing legislation that masquerades as “technical fixes,” but really makes substantive changes to Dodd-Frank reform law. And then they package completely reckless legislation with other provisions that are either necessary or sensible.
Democrats know better, and President Obama knows better. The American people know better.
I urge my colleagues to vote "no" on this bill.