Senate Banking Committee

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The United States Senate Committee on Banking, Housing, and Urban Affairs has jurisdiction over matters related to: banks and banking, price controls, deposit insurance, export promotion and controls, federal monetary policy, financial aid to commerce and industry, issuance of redemption of notes, currency and coinage, public and private housing, urban development and mass transit, and government contracts.

Contents

Committee consideration of financial reform - 111th session

March, 2010 Dodd draft

The Senate Banking Committee approves Manager's amendment and the Dodd March draft on a party line vote of 13-10 (March 22)


November, 2009 Dodd draft

Committee working in teams

President Obama’s proposals to tax and curb the activities of Wall Street have thrown an unpredictable element into the debate over financial regulatory reform. They also have touched off an intensive new round of lobbying and raised questions in Congress over whether his plan will add urgency or merely bog things down.

For two months, four pairs of Senate Banking Committee members — each with one Democrat and one Republican — have been meeting behind closed doors to reach a bipartisan compromise on regulatory reform. The House already adopted its version, largely along partisan lines, in December.

The new White House approach has already prompted the Senate panel, led by Senator Christopher J. Dodd, Democrat of Connecticut, to interrupt those negotiations. On Tuesday, in the first of several hearings on Mr. Obama’s proposals, the committee will hear from Paul A. Volcker, a former Federal Reserve chairman, and the deputy Treasury secretary, Neal S. Wolin.

Republicans on the committee said Mr. Obama’s call for a bank tax was a political response to the unexpected loss of a Massachusetts Senate seat. And Democrats, although more positive about the president’s remarks, were slow to embrace the specifics, like the tax, of his proposals.

“There is no question that this was presented to stoke and jump in front of a lot of populist furor,” said Senator Bob Corker, a Tennessee Republican who is working with Senator Mark Warner, a Virginia Democrat, on the problem of securities firms being so big and interconnected that their collapse could bring down the financial system.

“I think everybody watching understands that this was a political undertaking and not necessarily a substance undertaking,” he said. “This is a soak-the-rich populist grab.”

Senator Judd Gregg, a New Hampshire Republican who is working with Senator Jack Reed, Democrat of Rhode Island, on regulation of derivatives and credit rating agencies, offered a similar assessment of the president’s intervention.

“I think it’s confused the issue considerably, because he’s basically fanned the fires of populism and in a lot of instances, populism doesn’t give you either good regulatory activity or strong markets,” Mr. Gregg said. “It undermines both, in many instances.”

Senator Jon Tester, Democrat of Montana, disagreed. “The president’s remarks — I don’t see them as threatening, I don’t see them as negative, I see them as more ideas added to the pot that we need to consider,” he said in an interview. “I don’t see them hampering this process one iota.”

But industry representatives and Democratic Congressional aides say the president’s new proposals have already provoked a sharp increase in the volume and energy of the lobbying on regulatory reform, with more chief executives stepping over their government relations staff to request personal meetings with lawmakers. The big banks, the lobbyists say, have become increasingly alarmed that the legislative process may move in unexpected directions outside their control.

Chief executives of big banks have been in Washington for meetings with White House and Treasury officials and lawmakers on Capitol Hill. Jamie Dimon, chief executive of JPMorgan Chase, had lunch with Mr. Obama last Tuesday, and then met separately on Friday with the Federal Reserve chairman, Ben S. Bernanke, and the Treasury secretary, Timothy F. Geithner.

And industry lobbyists and chief executives have been lining up outside the doors of senators.

“Those eight senators hold the keys,” said Scott E. Talbott, a lobbyist for Financial Service Roundtable, which represents big banks.

Beyond the Warner-Corker and Reed-Gregg pairings, Senators Charles E. Schumer, Democrat of New York, and Michael D. Crapo, Republican of Idaho, are leading negotiations on overhauling corporate governance and executive compensation.

The final pairing — Mr. Dodd and Senator Richard C. Shelby of Alabama, the senior Republican on the banking committee — is taking up the issue of whether to create a consumer financial protection agency to oversee credit cards, mortgages, debt collection and other financial activities.

The White House proposed such an agency last June, and a modified version was part of the House reform bill passed in December. Industry groups, like the American Bankers Association, have strongly opposed it.

“The further away we get from the near collapse of our financial system in the fall of 2008, the harder it is to convince members of Congress to take a tough vote,” said Travis B. Plunkett, legislative director for the Consumer Federation of America, which has made the consumer agency a centerpiece of its lobbying.

Neither Mr. Dodd nor Mr. Shelby would comment on the status of their talks.

Ever since his initial reform proposal met with a frosty reception in the banking committee last fall, Mr. Dodd has insisted that regulatory reform would require bipartisan support. The Massachusetts Senate outcome, which denies Democrats the 60-vote majority they need to overcome a Republican filibuster, has underscored that point.

Supporters of the president, however, said his intervention could help goad lawmakers to pass tough legislation, arguing that the widespread anger at Wall Street would make it awkward for legislators to stand in the way of a bill labeled reform.

At a meeting with Mr. Dodd last month, Mr. Obama endorsed the need for consumer protections. But he did not specifically mention the idea of a separate agency, and Senate Republicans have said they are against it.

Mr. Obama’s newest proposals — to ban banks with federally insured deposits from casting risky bets in the markets and to turn back the consolidation in the financial industry — have arguably made Mr. Dodd’s job harder.

Senator Warner said he hoped the negotiations would stay on track. “I think this is too important to allow to become a partisan fight, and I’m still hopeful that we will see a bipartisan solution,” he said. But when asked to offer a timetable, he chuckled, saying only, “Hopefully sooner, rather than later.”

Senator who opposed credit-card measure may head banking panel

Tim Johnson of South Dakota, the only U.S. Senate Democrat to oppose legislation Congress enacted to curb credit-card abuses, is in line to become the chamber’s Banking Committee chairman next year.

The current chairman, Connecticut Democrat Christopher Dodd, announced yesterday he won’t seek re-election this year. His replacement by Johnson, who underwent brain surgery three years ago, would turn the panel’s leadership over to a lawmaker from a rural state dominated by small community banks. Johnson’s home state is also the headquarters of Citigroup Inc.’s credit-card operation.

With Democrats expected to retain their Senate majority after this year’s midterm election, Johnson “is ready to assume the role” of banking committee chairman next January, Julianne Fisher, a spokeswoman for the lawmaker, said yesterday. The lingering effects of his health problems “in no way affects his work,” Fisher said.

Johnson, 63, “doesn’t have the same point of view on a lot of issues that Dodd does,” said banking analyst Bert Ely, so his ascension to the chairmanship would “represent change.”

Of Johnson’s vote against the credit-card legislation, which became law in May, Ely said, “The credit business is a major employer in South Dakota; he is obviously sensitive to that.”

Partly because of his opposition to the measure, “my sense is that Senator Johnson is not believed by consumer advocates,” said Sally Greenberg, executive director of the National Consumers League, a Washington-based advocacy group.

Senator Dodd said to not seek re-election in November

Senator Christopher Dodd, a five-term Connecticut Democrat trailing in the polls, will not run for re-election in November, according to a Congressional aide familiar with the matter.

Dodd, 65, will hold a press conference today to announce his decision, the aide said, speaking on condition of anonymity. Dodd spokeswoman Justine Sessions was unavailable for comment. The Washington Post reported the retirement plan earlier.

As chairman of the Senate Banking Committee, Dodd has a leading role in crafting an overhaul of U.S. financial rules and last month supported Federal Reserve Chairman Ben S. Bernanke for a second term. He is also a top Senate negotiator on legislation that would expand U.S. health-care coverage.

Dodd’s announcement would come a day after North Dakota Democratic Senator Byron Dorgan said he won’t seek re-election. The party is bidding to maintain its control of 60 votes in the 100-member chamber to cut off stalling tactics that can be used to thwart legislation.

A Nov. 3-8 Quinnipiac University survey showed Dodd trailing former Connecticut Republican Congressman Rob Simmons by 11 percentage points in a hypothetical contest for the November Senate race. The poll of 1,236 registered Connecticut voters had a margin of error of plus or minus 2.8 percentage points.

Home Loan

Dodd’s popularity waned after Portfolio magazine reported in 2008 that he and Senator Kent Conrad, a North Dakota Democrat, received discounts on home loans from Countrywide Financial Corp., now part of Bank of America Corp. Both senators said they were unaware they were receiving preferential treatment.

Dodd made a failed bid for his party’s nomination in the 2008 presidential election, moving his family to Iowa, where the first balloting was held.

Dodd didn’t offer support last month for a proposal by Senator John McCain, an Arizona Republican, and Maria Cantwell, a Washington Democrat, to reinstate the Depression-era Glass- Steagall Act that split commercial and investment banking. The plan, which would require New York-based JPMorgan to split from Chase and would require Bank of America and Merrill Lynch & Co. to separate, was proposed to rein in Wall Street firms in response to the financial crisis.

Glass Steagall

“There are other things we can do to break them up, but I’m not sure that’s the right answer,” Dodd said in a Dec. 16 interview.

During his last re-election contest in 2004, Dodd counted employees of Bear Stearns Cos. and Citigroup Inc. as his top donors, according to the Washington-based Center for Responsive Politics, which tracks political donations. For his 2008 presidential bid, executives at the hedge fund SAC Capital Advisors LP, based in Stamford, Connecticut, were Dodd’s biggest backers, donating a combined $248,200, according to the center’s figures.

Dodd served in the Peace Corps in the Dominican Republic in the 1960s and is a fluent Spanish speaker. His father, the late Thomas Dodd, was also a Connecticut senator.

Committee Members, 111th United States Congress

Majority
  • Christopher Dodd, Chairman, Connecticut
  • Tim Johnson, South Dakota
  • Jack Reed, Rhode Island
  • Chuck Schumer, New York
  • Evan Bayh, Indiana
  • Robert Menendez, New Jersey
  • Daniel Akaka, Hawaii
  • Sherrod Brown, Ohio
  • Jon Tester, Montana
  • Mark Warner, Virginia
  • Jeff Merkley, Oregon
  • Herb Kohl, Wisconsin
  • Michael Bennet, Colorado
Minority
  • Richard Shelby, Ranking Member, Alabama
  • Bob Bennett, Utah
  • Jim Bunning, Kentucky
  • Mike Crapo, Idaho
  • Mel Martinez, Florida
  • Bob Corker, Tennessee
  • Jim DeMint, South Carolina
  • David Vitter, Louisiana
  • Mike Johanns, Nebraska
  • Kay Bailey Hutchison, Texas
  • Judd Gregg

Chairmen

Committee on Banking, Housing, and Urban Affairs

  • John J. Sparkman (D-Alabama) 1970-1975
  • William Proxmire (D-Wisconsin) 1975-1981
  • Jake Garn (R-Utah) 1981-1987
  • William Proxmire (D-Wisconsin) 1987-1989
  • Donald Riegle (D-Michigan) 1989-1995
  • Alfonse D'Amato (R-New York) 1995-1999
  • Phil Gramm (R-Texas) 1999-2001
  • Paul Sarbanes (D-Maryland) 2001
  • Phil Gramm (R-Texas) 2001
  • Paul Sarbanes (D-Maryland) 2001-2003
  • Richard Shelby (R-Alabama) 2003-2007
  • Christopher J. Dodd (D-Connecticut) 2007-

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