Why A Strong CFPA Is Necessary As McConnell Tries To Block Financial Reform

Mitch McConnell is doing his best to kill financial regulatory reform by Luntzifying his "just say no" position on the financial reform bill that's be

Mitch McConnell is doing his best to kill financial regulatory reform by Luntzifying his "just say no" position on the financial reform bill that's being worked on in the Senate. He says he has the votes to kill it on the floor. What cowards and Wall Street hacks.

Mitch McConnell has rounded up the necessary votes to block Democrats from bringing Wall Street reform to the Senate floor, a spokesman for the Senate Minority Leader said on Friday afternoon.

Senate Majority Leader Harry (D-Nev.) said on Thursday he planned to bring the bill to the floor next week where it would be debated and amendments added. McConnell has now persuaded 41 Republicans to vote against debating reform.

'We simply cannot ask the American taxpayer to continue to subsidize this 'too big to fail' policy. We must ensure that Wall Street no longer believes or relies on Main Street to bail them out. Inaction is not an option," McConnell writes in a letter to Reid that was provided to HuffPost.

Democrats have been battering McConnell all week for his firm opposition to the Democratic reform effort.

Reid spokesman Jim Manley told HuffPost that Reid will be moving ahead regardless.

"Congratulations. I hope they feel good," said Manley. "They've got 41 signatures on a weak, watered-down letter that simply calls for more negotiations. If they are at all serious, they will simply let us go to the bill next week and let the amendment process begin."

Manley said the bill will be brought up for a vote on a motion to proceed to debate later this coming week.

Different reports say that the Republicans might not stay united.

One report says:

But one Republican financial lobbyist predicts a domino effect if Republicans get on board: “If one goes, 20 will go. It will be ‘open the floodgates.’”

That's more of a dream than reality though and I don't doubt that right now McConnell has his 41. He seems to me to be bloviating a little too much at this point though.

Paul Krugman responds to McConnell's antics and hits him hard:

Well, Mr. McConnell is trying. His talking points come straight out of a memo Frank Luntz, the Republican political consultant, circulated in January on how to oppose financial reform. “Frankly,” wrote Mr. Luntz, “the single best way to kill any legislation is to link it to the Big Bank Bailout.” And Mr. McConnell is following those stage directions.

It’s a truly shameless performance: Mr. McConnell is pretending to stand up for taxpayers against Wall Street while in fact doing just the opposite. In recent weeks, he and other Republican leaders have held meetings with Wall Street executives and lobbyists, in which the G.O.P. and the financial industry have sought to coordinate their political strategy.

And let me assure you, Wall Street isn’t lobbying to prevent future bank bailouts. If anything, it’s trying to ensure that there will be more bailouts. By depriving regulators of the tools they need to seize failing financial firms, financial lobbyists increase the chances that when the next crisis strikes, taxpayers will end up paying a ransom to stockholders and executives as the price of avoiding collapse.

I agree with mcjoan when she says:"As long as Dems are feeling like bringing a fight to Republicans on financial reform, then they should go all in, and include a strong, independent Consumer Financial Protection Agency."

Simon Johnson and James Kwak have penned a great op-ed in The Hill saying that we need to have a strong CFPA and the threats that are in its way:

We have been and remain advocates of a strong, independent CFPA for familiar reasons: the increasing use of product complexity as a way to hide fees; the vastly unequal bargaining power between consumers and the oligopolies that dominate many financial products; the need for uniform standards that apply to non-bank institutions as well as traditional banks; and the abject failure of existing regulators to enforce those laws that did exist....

Given the political appeal of stronger consumer protection, it may be difficult for opponents to take a strong line against a new agency (although the Chamber of Commerce has done its best). So opposition will most likely focus on weakening consumer protection behind the scenes...read on

It's a great piece. I'm not an economist so I try and link the bright people on this topic and weigh in more on its political ramifications, but just for the sake of the nation, we need real financial regulations. A complete economic meltdown has already happened and it will happen again unless a strong CFPA and strict regulations are implemented to watch over the financial sector. Mitch McConnell and the GOP are acting like true paid-off shills for their Wall Street brethren. They could have taken the high road on this one issue, but that's impossible since it's all about the 2010 midterms now instead of the people who elected them.

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