Frank Bernheisel: The View From Here
Frank Bernheisel
Frank Bernheisel
Posted 3.7.18
Just Outside Washington


Withdraw sponsorship of pro-bank coddling bill

Senator Kaine (D-VA),

My request is that you withdraw your sponsorship for Senate Bill S.2155, introduced by Republican Senator Mike Crapo of Idaho. This bill will result in a major cutback of the Dodd-Frank Act. My understanding is that the bill will remove the oversight and rules that apply to banks with assets below $250 Billion.

Currently, banks with $50 Billion or more in assets get this oversight. Banks and other financial institutions were responsible for the Great Recession, which started in 2007 and caused many Americans to lose their retirement saving, their homes or both. Further, many banks below the $250 Billion asset level had to be bailed out by the federal government during the Great Recession; even these smaller banks were deemed "too big to fail."

It is clear that the practices of banks and financial institutions were responsible for causing the Great Recession and despite the obvious malfeasance of the bankers in this, no one went to jail.

Now, Senator Kaine, you propose to take away bank oversight. You claim that the small banks in Virginia need help but that does not appear to be true.

There is no evidence that the Dodd-Frank financial regulation is harming the finances of most people, least of all the banks. Data from the Federal Deposit Insurance Corporation for the third quarter of 2017 showed a 5 percent increase in profits for banks. For community banks the recorded increase was 9 percent. Further, community banks showed record-setting revenues last year; profits were up significantly from 2010, the year the Dodd-Frank Act was passed.

Americans for Financial Reform says SB.2155 cuts back mortgage-lending protections and weakens the Volcker Rule, which prevents banks from essentially gambling in high-risk securities. Paul Volker has expressed reservations about the bill.

Despite claims from President Trump and many in Congress that all federal regulations are retarding the economy, the economy, as Paul Krugman has pointed out, had 75 straight months of job growth under Obama, and said that there is "zero evidence that Dodd-Frank has been holding back the economy."

Senator Kaine, please remove your sponsorship from this ill-conceived bill. If small banks need some changes in their regulation, then I am sure that you and your staff can develop a better and more targeted approach.