Yesterday, via a 57-41 vote the Senate was unable to invoke cloture, cut off debate and bring Chris Dodd’s potpourri of Wall Street regulations to the floor. The vote was intended to be political theater. Democrats and Republicans are negotiating behind the scenes for compromise. Harry Reid wanted to use the vote to make the GOP look like the obstructionist friends of Wall Street.
“A party that stands with Wall Street is a party that stands against families and fairness,” said Reid, D-Nev.
What Reid doesn’t want you to know is the Dodd bill stands with Wall Street, well certain parts of Wall Street, because just like the Obamacare bill this new reform bill takes care of the best friends many progressives in the US Senate Mark Calabria in the NY Post laid them out this morning:
That’s no minor oversight, because insurance companies, like AIG, tend to have thrift charters rather than bank charters. So, as the bill stands now, AIG and other insurers that accepted massive bailout funds, such as The Hartford, would not be automatically covered. That’s a head-scratcher only if you forget that most insurance companies reside in Dodd’s home state, Connecticut.
…Remember the mortgage crisis? Well, the primary consumer-protection law for homebuyers is the 1974 Real Estate Settlement Procedures Act. The law requires the timely, accurate disclosure of relevant closing costs and prohibits “kickbacks” for the steering of settlement services.
For example, your real-estate agent cannot, under RESPA, be paid a fee for steering you toward a certain home inspector, title company or other closing service. Yet, under the Dodd bill, real-estate agents would be exempted from RESPA. If that weren’t bad enough, the Dodd bill exempts insurers and attorneys — both now subject to RESPA — from its consumer protections, too.
Having spent some time running the RESPA office at US Department of Housing and Urban Development, I can tell you its biggest lawbreakers are title-company and real-estate agents. It’s hard not to conclude that having the largest political-action committee in Washington has turned out to be a smart move for the National Association of Realtors.
Wait a second, doesn’t that mean the Dodd bill did away with consumer protections?
Attorneys, insurers and real-estate agents aren’t the only ones exempted from the bill’s consumer-protection provisions. The Farm Credit System, a government-sponsored lender that directly competes with banks, is excluded, too. Perhaps this should come as no surprise, because Fannie Mae and Freddie Mac, those crackerjack institutions at the heart of the mortgage meltdown, are also exempt. Worse yet is that Wall Street is exempted from the reach of the proposed consumer-protection agency — its regulation will remain with the Securities and Exchange Commission, which proved itself asleep at the switch during this last period of financial shenanigans.
But there’s more, Blanche Lincoln’s committee is also working another bill that will be merged with the Dodd bill. This version contains an Amendment to give special benefits to the Auto companies:
… Sen. Debbie Stabenow’s (D-Mich.) amendment that would exclude the captive finance arms of certain manufacturers from the bill’s requirements that derivatives only be traded over exchanges and through a clearinghouse. Only a handful of firms would be excluded — chief among them, of course, the automakers.
This Senate bill is not about protecting the little guy, its about protecting the friends of the progressive Senate such as Fannie Mae, Freddie Mac and of course the United Auto Workers via big auto. Before our Progressive government tries to “redistribute income,” maybe they should try to “redistribute the law,” so that it applies equally to everybody.