A congressman who has been called “Wall Street’s Favorite Democrat” said emotion and misperception are fueling his party’s opposition to financial deregulation, and accused Sen. Elizbaeth Warren (D-Mass.) of speaking about the issue in bad faith.
Rep. Jim Himes (D-Conn.) lamented the level of scrutiny of big banks within his caucus and decried the failure of the House this week to delay, without debate, the implementation of a Dodd-Frank provision on risk.
“There is a very strong movement out there, that any adjustment to Dodd-Frank of any variety is ‘gutting Dodd-Frank,’” the former Goldman Sachs vice president said Thursday on C-SPAN’s Washington Journal.
Himes said he voted to approve of the bill Wednesday, which was brought up under a suspension of House rules–a procedure which forbids debate or amendments on the legislation, but requires two-thirds of the body’s support for its passage.
He also said that the bill had, essentially, been passed by the House during the last Congress, and intoned that a few dozen Democrats inexplicably went from “ayes” to “no’s.”
At the heart of yesterday’s battle was a move to delay a provision of The Volcker Rule that would, in 2017, segregate collateralized loan obligations from federally-insured consumer deposits. Republicans wanted the implementation of that regulation stalled until 2019.
Sen. Elizabeth Warren (D-Mass.), who had called the effect of the legislation “a big bank giveaway,” praised House Democrats for killing the measure. In a tweet sent late Wednesday, she lauded House Financial Services Committee ranking member Maxine Waters (D-Calif.) and House Minority Leader Nancy Pelosi (D-Calif.) for stopping “the GOP from delaying the Volcker Rule for the biggest Wall St banks!”
Himes suggested the statement was dishonest.
“That’s a little bit of a mischaracterization. I was hearing yesterday how this is repealing the Volcker Rule, and ending the Volcker Rule” he commented, himself mischaracterizing Warren’s assessment, before describing the bill exactly as the senator did–as a delay. “They are a very small number of the securities out there,” Himes said of collateralized loan obligations, “and you’d get two more years to get rid of them.”
“It’s important that we focus on what is actually happening rather than using these broad brush slogans,” he claimed.
Himes isn’t the only House Democrat in recent weeks to intone that Warren has essentially lied to the public. In the wake of the “Cromnibus” budget deal opposed by Warren for a provision that allowed big banks to trade derivatives backed by publicly-insured retail deposits, Rep. Jim Moran (D-Va.) accused her of “demagoguing an issue that she knows the public doesn’t understand.”
Himes also said Thursday that he believes he has been punished by party leaders for not taking what he described as an “emotion-laden” or “good versus evil” approach to banking regulation. In November, he told reporters his lack of skepticism about Wall Street’s intentions, the amount of industry-types who lives in his district, and his past history in the financial sector caused Pelosi to overlook him as a possible Democratic Congressional Campaign Committee leader.
The vice chair of the centrist New Democrat Coalition, Himes said he believes that “emotion-laden” analysis has caused some of his party colleagues to take a revisionist view to recent history.
“There’s a lot of people who feel like the banks got away with it,” he said, of fraud related to the subprime mortgage crisis. “And that creates a lot of emotion that makes it very, very difficult to seek to balance regulation of that industry.”
In recent years, however, the number of white collar criminal prosecutions has been at historic lows despite widespread allegation of criminal activity on Wall Street. The Justice Department, under Attorney General Eric Holder, has investigated numerous banks for fraudulent practices, but refused to criminally prosecute major bank executives for alleged crimes related to the subprime mortgage crisis and the wave of foreclosures that followed.
In March 2013, before the Senate Judiciary Committee, Holder said he is“concerned that the size of some of these [banking] institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute–if we do bring a criminal charge–it will have a negative impact on the national economy, perhaps even the world economy.”
Lanny Breuer, head of the Justice Department Criminal Division from April 2009 to March 2013 , once said he was “losing sleep at night over worrying about what a lawsuit might result in at a large financial institution” and later confirmed to PBS documentary-makers that this was because of a possible “huge economic effect” of indictments.
