We’re very sorry to have to tell you this, but if you’re not watching Senate Banking or House Financial Services Committee hearings when the topic is about increasing bank capital or any new regulations to make the U.S. banking system less prone to blowing up, you are likely seriously underestimating how corruption has become the new normal in the United States of America.
The big banks’ trade associations and law firms that pay millions of dollars each year to registered lobbyists to bend Congress to their will are now dominating the witness list at these hearings. The right-wing Republican Senators that are funded by the banks and Wall Street then read from a script written by the lobbyists to ask their toady questions, pretending there is actually a give-and-take in these hearings.
Take, for example, the hearing held on September 14 by the House Financial Services Committee’s Subcommittee on Financial Institutions and Monetary Policy. That Subcommittee is Chaired by Republican Andy Barr of Kentucky, whose largest donor base is the “Securities and Investment” industry. That industry gave Barr $500,142 in the last election cycle, according to OpenSecrets.org, the nonpartisan watchdog of campaign financing.
Barr’s hearing was about the Federal Reserve, FDIC and Office of the Comptroller of the Currency proposing higher capital requirements for the largest banks, those with more than $100 billion in assets. The proposal does not impact community banks at all.
The new rules were proposed both to comply with the international regulatory agreement known as Basel III as well as to address the lessons learned this past spring when the second, third and fourth largest bank failures in U.S. history occurred, leaving the taxpayer-backstopped Deposit Insurance Fund nursing losses of approximately $31.5 billion. The spring banking crisis also necessitated the Fed setting up yet another bailout program, the Bank Term Funding Program, which has thus far loaned out $108 billion to unnamed banks with loans of up to one year in duration.
Instead of bringing unbiased scholars to the witness table, Chairman Barr offered the following as witnesses:
Greg Baer, the President and CEO of the Bank Policy Institute (BPI), the trade association for the largest banks in the U.S. The Chairman of the Board of BPI is non other than Jamie Dimon, the Chairman and CEO of the biggest and, officially, the riskiest bank in the United States. Also on the Board of BPI is the CEO of Citigroup, Jane Frazer, the CEO of Bank of America, Brian Moynihan, and numerous other Wall Street mega bank CEOs.
Andrew Olmem, a law partner at registered lobbyist and law firm, Mayer Brown. Olmem was himself a registered lobbyist for much of the time from 2013 to 2021. See his Revolving Door profile here. Mayer Brown’s clients include large banks and other financial services firms seeking to squirm out of tighter regulations.
Robert Broeksmit, President and CEO, Mortgage Bankers Association, an industry that played a major role in the housing collapse during and after the 2008 financial crisis.
The one non-shill on the witness stand was Alexa Philo, a Senior Policy Analyst at Americans for Financial Reform, who appeared to have been selected by Democrats on the Subcommittee.
It appears that now that Republicans are in control of the House of Representatives, they get a 3-to-1 pick of witnesses at hearings critical to the financial stability of the United States.
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h/t welp007