WASHINGTON — President Barack Obama’s stuttering bid to rein in the largest US banks got a shot in the arm Monday, as a key Senate ally unveiled a package of bank reforms described as the most sweeping in 80 years.
Senate banking committee chairman Christopher Dodd outlined plans to regulate the massive US banking sector, warning an overhaul was needed to prevent another large-scale crisis that the US economy might not survive.
Speaking two years after the investment bank Bear Stearns collapsed — the opening salvo in a crisis that engulfed the globe — Dodd called for more government control over “too-big-to-fail” banks and for reform of a regulatory system that “remains hopelessly inadequate.”
“If there was a watchdog on duty, it did not bark,” Dodd said, outlining reforms.
The packages’ highlights include the creation of a consumer protection agency and a powerful committee to monitor systemic risks caused by large firms.
The bill would also clamp down on risky investment instruments, which fueled the crisis, and give shareholders a say on big executive bonuses.
Dodd warned that any efforts to delay reform invited calamity.
“Neither I nor anyone else can tell you with any degree of certainty that the American economy could survive another crisis of this magnitude,” he said.
But the reforms have been the subject of fierce lobbying in Washington, with some of the city’s biggest political hitters involved in tussles over what the rules should be, and who should enforce them.
Dodd’s decision to house the consumer protection agency at the Federal Reserve was met with barely concealed fury by some of his Democratic colleagues who accused him rewarding a watchdog that failed miserably to prevent the worst financial crisis in decades.
In a bid to address some of those criticisms, Dodd said the agency would be headed by a director appointed by Obama, and would have the power to write rules governing all financial entities.
Today Americans face an alphabet soup of financial regulators. Depending on the complaint, redress might be found through the Federal Deposit Insurance Corporation, the Federal Reserve, the Office of the Comptroller of the Currency, the National Credit Union Administration or the Treasury’s Office of Thrift Supervision.
Supporters say a new, powerful, independent agency could transform policing of everything from mortgages, to credit cards to banking fees.
But in private, those close to the discussions accuse Dodd of watering down reforms, pandering to Republicans and the banking lobby in order to strike a deal before he retires later this year.
Ahead of the announcement, markets appeared increasingly concerned that political bickering will cause further uncertainty.
“One thing we know: The Democrats and Republicans are going to fight over it. And that is my worry.” said Joel Naroff of Naroff Economic Advisors.
“Changing around the Fed and financial regulations in this political environment is dangerous. Politicians will likely disagree even if the proposals are good simply because they came from the other side.”
Dodd’s proposals will face a vote in committee later this month.
James Comey says it is ‘fair’ for Democrats to blast AG Barr at Mueller hearing
Former FBI Director James Comey said it would be fair game for Democrats to go after Attorney General Bill Barr during Wednesday's televised hearings with former Special Counsel Robert Mueller.
Barr was highly criticized for releasing a letter summarizing the Mueller findings, which was found to be inaccurate when the redacted report was released.
"I heard from a source today, familiar with Attorney General Barr's thinking, that is nervous about being attacked tomorrow. What sort of exposure does Attorney general Barr have?" MSNBC anchor Nicolle Wallace asked.
"I don’t think he will be attacked by the witness or witnesses," Comey replied.
Two teen suspects sought in Canada murders of US-Australian couple
Police in Canada on Tuesday named two suspects wanted in connection with three murders, including the killings of an American woman and Australian man whose bodies were found in rural British Columbia.
Kam McLeod, 19, and Bryer Schmegelsky, 18, had been reported missing in British Columbia but are now believed to be on the run.
They were last seen in the north of Saskatchewan province, driving a gray Toyota RAV-4, a spokeswoman for the Royal Canadian Mounted Police, Sergeant Janelle Shoihet, told a press conference.
Both suspects are considered to be dangerous, police said in a warning to the public.
Republican Marsha Blackburn shuts down applause as 9/11 bill vote unfolds in the Senate
The funding for 9/11 first responders has officially passed the Senate after public outcry and significant lobbying by firefighters, police and others who worked after the Twin Tower attacks. But it was the emotional testimony from comedian Jon Stewart that drew much-needed publicity to the cause.
But as the bill was coming up for a vote, with the assurance it would pass, the gallery erupted with applause, with some senators joining in. Sen. Marsha Blackburn (R-TN) shut it down quickly.
"Expression of approval is not permitted in the gallery," Blackburn shouted, while banging her gavel. She proceeded to bang her gavel at least 25 times more and repeated again that any expression of approval was not permitted.