Barney Frank: We're Not Going to Give Republicans Cover to Kill Financial Reform
Just as John predicted, Bob Corker has said he can't vote for the financial reform bill he helped to craft.
Sen. Bob Corker (R-Tenn.) signaled Wednesday that he won't support the financial regulation reform bill he helped craft.
Corker told the Wall Street Journal that he "absolutely cannot support" the financial reform bill in its current form.
"I couldn't support the bill in its current form," Corker told the Journal.
But the Tennessee Republican vowed to try to continue to work for a bipartisan solution on financial reform.
Rep. Barney Frank joined Keith Olbermann to talk about the Republican obstruction in the Senate and said if the Republicans want to try to stop financial reform from going through, he's more than willing to have the conference committee in public. They were demanding it for the health care bill. We'll see how quickly they flip flop on this one.
Transcript via MSNBC below the fold.
OLBERMANN: The one Republican senator most likely to help Democrats pass new law to reform the way our banks work and do not work now says he absolutely cannot support the bill in question. Our fourth story tonight: the bill‘s intent is to prevent another devastating financial meltdown. But Tennessee‘s senator, Bob Corker, says he cannot support it because it gives consumers too much protection.
The House bill shaped by Democrats, including our next guest, Financial Services Chairman Barney Frank, establishes exactly what President Obama called for—an independent agency to protect consumers against predatory banking practices. The Senate bill authored virtually single-handedly by Banking Chairman Chris Dodd of the Senate locates the consumer protection agency inside the Federal Reserve, which is primarily responsible, not for consumers, but for protecting the system. Senator Corker in today‘s “Wall Street Journal” says the agency Dodd proposes still has too much power to protect consumers.
In a speech today, Corker explained his opposition. According to the newspaper “The Tennessean,” Corker objects to Dodd‘s proposal that banks would have to hold on to, not sell to another institution, at least 5 percent of any loans they make—which would give them at least some incentive to ensurethat the loans were repayable because they would lose money when they were not repayable.
Even though Dodd‘s proposed consumer protection agency would be part of the Federal Reserve, Corker also wants banking regulators, those charged with protecting the banks from themselves, to have veto power over any consumer protection agency, quote, “I don‘t want an overzealous consumer protection agency. We need balance. Right now in the bill, there‘s too much independence and too little coordination between the regulators and the consumer protection side.” He said this out loud.
And while Dodd‘s talks with ranking banking member, Richard Shelby, broke down, Corker says he is still optimistic about negotiating changes to the bill before it is taken up by the full Senate potentially as early as this month or next. Joining us now as promised, chairman of the House Financial Services Committee, Congressman Barney Frank. Thank you for your time tonight, sir.
REP. BARNEY FRANK: Glad to, Keith. It‘s a very important issue, obviously.
OLBERMANN: Obviously. “The Wall Street Journal” writes, Democrats need support from at least one Republican to pass the measure in the Senate. Are Republicans already backing off on repealing health care, seemingly getting away from that crazy idea—why not let them filibuster on behalf of the banks, if that‘s what they want to do?
FRANK: I agree with you. This is a “bring it on” moment. Senator Dodd—let me say, senator Dodd is doing an excellent job, and the bill he wrote originally was a very good bill. He has gone every possible step to accommodate them. And what happened with this, Senator Corker was trying to negotiate with Senator Dodd. He was overruled by the Republican leadership. Let‘s be very clear. Senator McConnell and Shelby told Corker, no.
They have, I think, a fantasy that they‘re going to vote 41 Republicans stand up and say, there should be no reform. Understand, Keith, that when the House voted on this bill last December, and the bill that came out of the House is a good bill. It‘s not everything I wanted, I would have liked to have a little more strength, but we did a pretty good job. Our problem was, frankly, that health care was dominating the news, so we were kind of left alone with the lobbyists. We still did a pretty good job.
But what—they wanted—when we wrote on that bill in December, every single Republican—I‘m not exaggerating, Casey Stengel used to say, you can look it up—every single Republican in the U.S. House of Representatives voted to kill every single form of financial reform. They didn‘t say, make it better. They didn‘t say better balance. They said nothing. Nada. Kill it all.
Now, Shelby and the House minority leader, John Boehner, went before the American bankers a couple weeks ago and promised them that they would use parliamentary tactics to kill the bill. That‘s when Boehner outrageously said to these bankers, don‘t let these punk staffers push you around, the very hardworking people we work with.
So, I agree with you completely. Let‘s call their bluff. I don‘t think the American people want to see a consumer agency that has to check with the banks‘ supporters before it does anything.
And the other issue you mentioned, we call it securitization. Thirty years ago when you borrowed money, you borrowed money from the person who expected you to pay him back, and he or she was pretty careful about lending it. Then they came up with this scheme whereby I lend somebody money, I lend 1,000 people money, and I sell the right to be repaid by other—to other people. That gives me no real incentive to have the repayment.
So, we‘re asking for a fairly small, 5 percent to 10 percent hold. By the way, if I buy insurance from a company and that company gets worried and wants to get reinsurance, they cannot reinsure the whole risk. They have to have what we call a risk retention.
So, what you have is the Republicans apparently deciding as a party that everything worked wonderfully and there should be no reform whatsoever.
And last point, (INAUDIBLE), I have a contest going on. I want someone to tell me an example in American history, in the financial area, where we overregulated on behalf of consumers. I can‘t think of one, unfortunately.
OLBERMANN: Well, this begs that point, and you included it in that great summation of what‘s going on here. But I‘d like to emphasize this one idea here about where that consumer protection agency is. What happens if there‘s a version created that is not the way you have outlined it?
FRANK: Well, first of all, that‘s not going to happen until we have a vote in the Senate. And I am committed—you know, my Republican colleagues go off and on like a light switch. They wanted the health care bill negotiated in public. Well, I want in charge of the health care bill, but I have a lot to say about the financial bill. I‘m giving them their wish. We will have a conference.
If a bill comes out where the Republicans and over Chris Dodd‘s objection—and let me make a point about Chris Dodd, who‘s been very unfairly criticized in some places. He‘s doing the best job that I think he can do. If he—if you get 41 Republicans filibustering, then we‘re going to sit in public and have a nice conference and you can all cover us, and let the Republican members of that conference from the Senate vote to kill this independent agency, because we‘re not going to—we‘re not going to provide cover for them. I‘m not in the business of helping make up Republicans so they can pretend to be what they‘re not.
OLBERMANN: Yes, that quote—I mean, Senator Corker would be described in New England as a corker, even if his name wasn‘t that, based on this --
OLBERMANN: -- on this quote. He said this aloud. How do you get re-elected to anything higher than dog catcher defending the banks against the people?
FRANK: Well, I think they made a mistake. Here‘s the deal—they got a little overconfident. Last year, when we were doing this fight—and our bill is a pretty strong. I wish it was a little tougher on derivatives, although we do some make great strides there. Everybody was talking about health care. So, you know, they got away with opposing it.
Here‘s their argument now. It‘s big government, you can‘t trust. There‘s an interesting thing going on here, Keith, with the Republicans. First they ran the government for six years. They had the president, the House and the Senate. They messed things up. In the financial area, they didn‘t regulate. They allowed all these terrible things to happen.
Now that we‘re trying to fix it they say, oh, you can‘t trust the government. Well, I couldn‘t trust the government they ran, but now they can make it better. I don‘t think it‘s going to work. I think the public will them—and let me say this, I don‘t think all 41 Republicans are going to stand up and try to kill independent financial reform.
OLBERMANN: One would think not, but we‘ve seen worse before. Congressman Barney Frank, chairman of the House Financial Services Committee—always a pleasure. Thank you for your time.
FRANK: Thank you, Keith.