President Obama signed into law Dodd-Frank, the financial reform package last July. In a Newsweek article today titled The Billion Dollar Bank Heist, Gary Rivlin explains how conservatives are trashing the law’s provisions:
Take what’s been happening with the Consumer Financial Protection Bureau, which is the law’s most significant and controversial provision. The agency is set to go live next week, except that Republicans in the Senate have made it clear they won’t confirm anyone to serve as its head unless the agency is radically scaled back. All told, Dodd-Frank has some 300 provisions, and the bulk of them are under attack by a number of foes, from bankers to check-cashing companies to free-market Republicans.
Rivlin goes on to describe the treatment Elizabeth Warren is getting from opponents of Dodd-Frank:
Or consider the assault on Elizabeth Warren. The Harvard Law School professor first proposed the idea of a consumer-protection agency in 2007 and has since become a lightning rod for conservative anger over financial reform. On Meet the Press, Mitch McConnell, the Senate minority leader, cast Warren as an ideologue hellbent on creating an agency that “could be a serious threat to our financial system.
“Why would anyone want to gut the consumer agency before it has had a chance to help a single family?” Warren asked in an email exchange with NEWSWEEK. Warren, of course, knows that the answer to that question lies not just with the big banks that don’t see anything in it for them, but also with the fringe lenders who stand to lose the most in the face of a strong consumer-protection agency. These include check cashers, pawnbrokers, and payday lenders (who make high-interest loans against a person’s next paycheck).
Warren knows, too, that she has become a piñata in the political arena precisely because the consumer bureau she dreamed up is so popular. If the Republicans can dirty Warren and cast doubts on her creation—and, by proxy, the rest of financial reform—they can potentially strike an even bigger victory: undermining one of the sturdiest planks in the president’s reelection platform.
Maybe the miracle is that Dodd-Frank passed in the first place. The financial-services sector was hit hard by the economic meltdown, so banks spent less on lobbyists and in campaign contributions, according to the watchdog organizations that monitor outside spending on politics. But by all accounts that slowdown was brief. As soon as reform became a threat in 2009, banks ratcheted up spending again. Luckily, they had plenty of cash on hand—courtesy of the federal bailout.
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