With Monday’s surprise announcement that Rep. Barney Frank (D-MA) will retire next year, Washington is abuzz about who could be tapped to replace him on the powerful House Financial Services Committee, better known as the banking committee.
That’s especially the case due to his slated successor’s interesting history handling matters pertaining to the nation’s largest banks.
Next in-line to be the ranking member of the banking committee is Rep. Maxine Waters (D-CA), who said earlier this year that President Barack Obama should tax “gangsta” banks “out of business” if they don’t help struggling home owners.
She also quipped at a Calif. town hall earlier this year that the tea party can “go straight to hell” for opposing government investment to get people working again. “I’m not afraid of anybody!” she said. “This is a tough game. You can’t be intimidated. You can’t be frightened.”
That’s likely enough fodder to get big finance chiefs scrambling, especially with Waters as the likely replacement for Frank on the committee that played a key role in launching new financial regulations and consumer protections (PDF) in the wake of the 2008 crash. The Dodd-Frank Wall Street Reform and Consumer Protection Act has been a focal point of the wealthiest institutions’ activism ever since it passed, but with Waters on the committee there’s potential for even stronger measures if Democrats retake the House of Representatives.
However, there’s a hitch: Waters has been charged with ethics violations that relate, in part, to her participation on the finance committee. She allegedly helped a bank secure a $12 million bailout, even though her husband was a shareholder and former member of their board: a serious conflict of interest.
She’s repeatedly requested a trial to clear her of the charges, and in August the House ethics committee was forced to bring in outside counsel after two attorneys who had been investigating Waters were removed from the case.
Nevertheless, Waters has already begun lobbying ranking Democrats to take charge of the party’s efforts on the finance committee, party insiders told Politico on Monday. The decision would fall to House Minority Leader Nancy Pelosi (D-CA), who could pick Waters — or, possibly, the second in line for the finance committee, Rep. Carolyn Maloney (D-NY).
Maloney would certainly be more palatable to the finance industry, thanks at least in part to her constituency, which had the highest median income and paid the most income taxes out of any district in 2007. She also doesn’t have a history of threatening to tax banks out of existence, which would surely be appealing to any finance-friendly lobbyists pulling for anyone but Waters.
But even she too could prove to be a thorn in the side of big finance: Maloney authored the credit card users’ bill of rights, signed into law in 2009. That bill succeeded in banning anti-competitive practices like double-cycle billing and retroactive interest rates that often times surprise cardholders with large, unexpected fees. It also prohibited creditors from issuing accounts to people under age 21 unless they had a parent co-signer, or could prove they have the means to pay off their debts.
Still, that may not be compelling enough for Pelosi to abscond with House tradition, and a decision is not expected quickly. Attorneys investigating Waters are expected to report their recommendations to the House ethics committee by Jan. 3, 2012. At least until then, it seems likely that the committee’s leadership will remain up in the air.
Photo: Flickr user NESRI.