Committee Dems Voting No to Tougher Finance Regulations Received Twice as much Money
November 19, 2009 - The House Financial Services Committee voted yesterday to give regulators the authority to break up large financial firms that create too much systemic risk, in an effort to prevent future financial crises. The vote passed by a 38-29 margin, but three Democrats joined with all Republicans voting no. Those three Democrats--Melissa Bean (D-IL), Dan Maffei (D-NY), and Gregory Meeks (D-NY)--received an average of $99,483 from banks' PACs in the last two years, 119% more than the average of $45,358 received by the 38 Democrats voting for tougher regulation.
The Financial Stability Improvement Act of 2009 (to be H.R. 3996), sponsored by Barney Frank (D-MA), is one measure in a package of industry reform bills moving through the committee. Developed in response to last year's financial crisis and subsequent bailout of "too big to fail" firms, the bill calls for pro-active regulation of institutions that would otherwise be a systemic risk to global economy.
Paul Kanjorski (D-PA) offered an amendment that strengthens the regulatory language in the bill he originally introduced. Under the language of the amendment, if the size, reach or interconnectedness of any of the 50 largest financial institutions (determined by asset size) poses a systemic risk to the economy, regulators would have the power to limit mergers and acquisitions, eliminate some products or services, or break up the firm. The committee is expected to vote on the bill December 1 and it is scheduled to be on the House floor in mid-December. Scott Valentin, the banking analyst at FBR Capital Markets, has stated that this provision is not expected to survive in the Senate version of the bill.
The amendment was met with fierce resistance from the financial industry, including the Financial Services Roundtable and the Financial Services Forum, and from Republicans, who deemed the measure unconstitutional.
|PAC Contributions from Banks to House Financial Services Committee Democrats|
|Kilroy, Mary Jo||OH-15||Yes||$9,000|
|Average received by the 3 House Democrats voting No||$99,483|
|Average received by the 38 House Democrats voting Yes||$45,358|
Campaign contributions data provided by the Center for Responsive Politics' OpenSecrets Open Data. Date range of contributions is: August 13, 2007 - August 12, 2009. PAC contributions from the following special interests were included: banks & lending institutions; commercial banks & bank holding companies; investment banking; securities, commodities & investment; and security brokers & investment companies. The draft text of what will be H.R. 3996, the text of the Kanjorski Amendment and the record of the vote on the Kanjorski amendment is on the House Financial Services Committee website.
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