Dems Defeat Another Attempted Wall Street Scam

Democrats succeeded in stopping yet another Wall Street scam Jan. 7, when the new Republican leadership in the House tried to ram through a bill, HR 37, to postpone for another two years a part of the Volcker Rule which requires banks to get rid of their collatoralized loan obligations (CLOs, bundled securitized corporate debt). The Federal Reserve in December unilaterally extended the deadline for banks to dump their CLOs from 2015 until 2017. HR 37 would have extended that deadline until July 2019!

The Republican leadership brought the bill to the floor under special rules allowing it to go through without amendments, even though that process requires a 2/3 vote rather than a simple majority. They assumed they had enough Democrat votes, as they did before Christmas in passing the removal of Dodd-Frank Section 716, which had prohibited banks from dealing in derivatives with FDIC protected money. But Jan Shakowsky, Pelosi, and others mobilized to stop HR 37 by 6 votes, to the shock of the GOP leaders.

Only 35 Democrats supported the legislation. Huffington Post notes that in the past “pro-Wall Street bills often passed with 100 or more Democratic supporters,” showing an anti-Wall Street mood now taking hold. One Republican voted against: Walter Jones, of course.

The Huffington Post notes that “between 94 and 96 percent of the domestic CLO market is held by banks with at least $50 billion in assets, according to federal regulators, who value the market at between $84 billion and $105 billion.”

Obama rose to the occasion, showing his ability to lie outrageously. White House spokeswoman Jennifer Friedmann said Obama opposed the bill: “The President has been clear about his opposition to legislation that would weaken key consumer protections and provisions of the Dodd-Frank Wall Street Reform Act” — this, after Obama joined hands with Boehner and Jamie Dimon to scrap Dodd Frank’s Section 716 last month!