Boswell votes with House GOP to loosen Dodd-Frank rules

The U.S. House voted yesterday to exempt small lenders from regulations adopted in the 2010 financial reform bill commonly known as Dodd-Frank. All Republicans present and 73 Democrats supported the Small Business Credit Availability Act. The roll call shows that Democrat Leonard Boswell (IA-03) was one of the yes votes, along with Republicans Tom Latham (IA-04) and Steve King (IA-05). Democrat Bruce Braley (IA-01) voted against the bill, while Dave Loebsack (IA-02) was absent, attending President Barack Obama’s event in Iowa City.

Proponents assert that this bill would help farmers, manufacturers, and small and rural businesses secure loans. I’ve posted the official bill summary after the jump. It sounds like a leap of faith to assume that loosening regulations on small banks, savings associations, and credit unions will free up credit for small businesses.

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Iowa political reaction to jobs report, recess appointments (updated)

The Bureau of Labor Statistics released new employment figures yesterday, showing nonfarm payroll employment up by 200,000 in December 2011, and the unemployment rate down slightly to 8.5 percent. Several members of Congress from Iowa cited the news a Their statements are after the jump.

I’ve also enclosed reaction from U.S. Senators Chuck Grassley and Tom Harkin to President Barack Obama’s recess appointments of Richard Cordray to head the Consumer Financial Protection Bureau and three members of the National Labor Relations Board. While Harkin welcomed Cordray’s appointment, Grassley slammed the president for “upending years of Senate practice and legal precedent.” Grassley was among Senate Republicans who filibustered Cordray’s confirmation last month.

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Grassley, Harkin reject delay of debit card fee rules

Resisting a full-court press from bank industry lobbyists, Senators Chuck Grassley and Tom Harkin voted yesterday against delaying new regulations of fees banks can charge for debit card retail transactions. Under the Dodd-Frank financial reform law enacted last year, the Federal Reserve Board has until July 21 "to ensure fees banks charge merchants for debit card purchases are ‘reasonable and proportional.’" Those fees currently average 44 cents per transaction, totaling approximately $1.3 billion per month nationwide. A proposed Fed rule would cap the fees at 12 cents per transaction.

Democratic Senator Jon Tester of Montana and Republican Senator Bob Corker of Tennessee have been trying to water down the regulation:

Tester and Corker had originally proposed a 24-month delay, then shortened it to 15 months and on Tuesday filed an amendment to reduce it to 12 months in a bid to pick up support.

The Tester-Corker measure would require bank regulators to study the impact of the Durbin regulation on consumers and community banks and credit unions for six months. It requires regulators to issue a rule implementing new swipe fee rates six months later but gives them power to include a wider range of costs which could let banks charge more than the Fed is currently proposing.

The number two Senate Democrat, Dick Durbin of Illinois, sponsored the Dodd-Frank amendment on debit card swipe fees. Speaking on the Senate floor yesterday, Durbin said “leading up to this vote has been one of the most heated debates and exchanges that many of us in the Senate have seen in our time.” The Hill’s Alexander Bolton called it ” the biggest K Street battle of 2011.”

Tester and Corker fell six votes short of the 60 needed to approve their amendment to the financial reform law. In an unusual split, 19 Democrats and 35 Republicans voted to delay the debit card fee rules. Grassley and Harkin were among the 12 Republicans, 32 Democrats and one independent who voted against the amendment (roll call).

Both of Iowa’s U.S. senators both voted for Durbin’s amendment on debit card fees last May (roll call). Kudos to them for resisting the pressure to delay this reasonable regulation. Bolton noted that nine Senate Democrats who supported the original debit card rule also voted for the Tester-Corker amendment.

For what it’s worth, credit cards still offer consumers more protection than debit cards for certain retail transactions.

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Grassley votes no as Senate passes financial reform package

The Senate passed the final version of new financial regulations yesterday. Senator Chuck Grassley voted against the cloture motion to allow the Restoring American Financial Stability Act of 2010 to come to the floor, and later voted against the bill itself, as did all Senate Republicans except for Scott Brown of Massachusetts and Olympia Snowe and Susan Collins of Maine. Senator Tom Harkin voted to overcome the Republican filibuster attempt and for the bill itself, as did all other Senate Democrats except Russ Feingold of Wisconsin.

Grassley had joined Snowe, Collins and Brown in voting for the Senate’s original financial reform bill in May. After the jump I’ve posted Grassley’s official statement explaining his reasons for opposing the bill that emerged from the House/Senate conference committee.

Statements from Harkin and Grassley’s Democratic opponent, Roxanne Conlin, are also posted below.

Alison Vekshin of Bloomberg News and Annie Lowrey of the Washington Independent briefly summarized the bill’s provisions; click here for the full text. On balance, passing this bill is better than doing nothing, but too many important reforms were excluded from the package or watered down in conference. I also agree with former Clinton cabinet official Robert Reich, who argued here that the bill is too narrow in scope:

The White House and Democratic leaders could have described the overarching goal as overhauling economic institutions that bestow outsize rewards on a relative few while imposing extraordinary costs and risks on almost everyone else. Instead, they have defined the goal narrowly: reducing risks to the financial system caused by particular practices on Wall Street. The solution has thereby shriveled to a set of technical fixes for how the Street should conduct its business.

Share any thoughts about financial reform in this thread. Conlin appears likely to bring this up repeatedly in her campaign against Grassley. One of her campaign’s statements released yesterday noted that so far in this election cycle, “Grassley has taken close to $900,000 in campaign contributions from Wall Street bankers and their PACs.”

UPDATE: House Democrat Barney Frank was one of the key architects of this bill. He discusses some of its high and low points here.

House Appropriations Committee Chairman David Obey, who is retiring this year, shared some of his parting thoughts with The Fiscal Times:

But I leave more discontented when I came here because of the terrible things that have been done to this economy by political leaders who allowed Wall Street to turn Wall Street banks into gambling casinos which damned near destroyed the economy.

I think the more important thing was what was my biggest failure. I think our biggest failure collectively has been our failure to stop the ripoff of the middle class by the economic elite of this country, and this is not just something that happened because of the forces of the market.

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