If Senator Tim Johnson ascends to the chairmanship of the Senate Banking Committee, the biggest winners will be Wall Street, pay-day lenders and credit card companies. The biggest losers: widows and orphans.
In late 2006, the South Dakotan spoke out against an effort by his fellow Democrats to cap the interest rates that members of the military pay for short-term loans. "This time it's military. Who's to say it isn't going to be widows and orphans or other sympathetic groups in the future?" he griped in an interview with the American Banker.
That's the man who's next in line to lead the Banking Committee if the current chair, Sen. Chris Dodd (D-Conn.), as expected, vacates the position to take the Health, Education, Labor and Pensions Committee chair left empty by the death of Ted Kennedy.
Meanwhile, Democrats are hoping to push through the most sweeping financial regulations in a generation, including the creation of a government panel that would regulate financial products with an eye toward consumer protection. All of that will have to go through the Banking Committee.
Consumer advocates and backers of a regulation overhaul are deeply concerned that handing the committee to Johnson would be a death sentence for reform.
"He's got a long track record of supporting small predatory loan companies, pay-day loan companies," said one longtime consumer advocate, who spoke on the condition of anonymity because he would have to work with Johnson as banking chair.
In 2003 and again in 2005, Johnson intervened with federal regulators on behalf of pay-day lenders, sending a letter to the Federal Deposit Insurance Corporation,