Wall Street Reform and Consumer Protection Act and The New Democrats

by: Jon Kantrowitz

Mon Dec 14, 2009 at 16:14:25 PM EST

One major area of concern is limitations on states' rights to protect consumers. This came in the form of an amendment inserted into the bill late Wednesday after New Democrats held the bill hostage.

Sponsor of the amendment was Illinois Representative Melissa Bean, who has received $393,000 from the financial sector, 50% of all the money she raised in 2009. According to some reports, Bean and Jim Himes had failed to pass similar language in committee.

Here's more on the negotiations between the New Democrats and the administration of the provision which weakened to overall bill:

Throughout the week, the Democratic leadership was forced to fend off several attempts by moderate Democrats to narrow the bill's provisions, especially those relating to the Consumer Financial Protection Agency (CFPA). On Wednesday, word quickly spread around the Capitol that a federal preemption amendment backed by Rep. Melissa Bean and her allies in the New Democrat Coalition faced strong opposition from the White House and Treasury, who were seeking to bar it from consideration on the House floor. The Bean amendment would have broadened the CFPA's ability to preempt state consumer protection laws. However, following direct negotiations between the New Dems and top Treasury officials, a modified version of Bean's preemption amendment was ultimately wrapped into a manager's amendment that passed on Thursday.

"States play a critical role in ensuring consumers are truly protected against abuses and outrageous treatment by lenders and financial institutions. Preempting state laws would roll back consumer financial protection before reform even gets off the ground," said Carmen Balber, Washington director for Consumer Watchdog.

• Loopholes in derivatives regulation proposal that could leave 30% or more of the multi-trillion dollar market unregulated
• Exemptions for some public firms from outside audits of their books (rolling back provisions of post-Enron accounting reforms)
• Little authority to break up banks that endanger the financial system with their size or behavior
• No relief for struggling homeowners to allow bankruptcy judges to adjust the terms of home mortgages

Here is a detailed analysis of the good and bad in the bill, compiled by Americans for Financial Reform.

Jim Himes voted for the bill. Here are some of his votes on amendments, however:

RC# 958- The Stupak Amendment

Courtney, DeLauro, Larson, Murphy Yes
Himes No

Other votes where Himes voted with the Republicans:

Roll Call Vote #959 The Stupak Amendment

Republicans- Yes- 5, No- 169
Democrats- Yes 145, No- 110
Himes- No

Republicans- Yes- 3, No 170
Democrats- Yes 90, No- 160
Himes- No

RC# 957- Barney Frank Amendment
Republicans- Yes- 1, No- 173
Democrats- Yes- 149, No 107
Himes No

RC# 956 Murphy Amendment (NY)
Republicans- Yes- 173, No- 0
Democrats- Yes- 131, No 124
Himes -Yes

RC# 955
Republicans- Yes- 18, No- 156
Democrats- Yes- 210, No- 46
Himes- No

The top 5 New Democrats who received financial sector funds in 2009 are:

Jim Himes (D-CT) $430,123
Melissa Bean (D-IL) $393,000
Kendrick Meek (D-FL) $329,383
Ron Klein (D-FL) $270,281
John Adler (D-NJ) $215,598

I provided Jim Himes' office with a rough draft of the above, and Elizabeth Kerr of his office provided me with the following statement:

The Congressman took a number of votes that many Republicans supported as well. I think that speaks to the bipartisan nature of the bill and the work the Congressman has done to ensure we have effective, balanced financial regulation that protects consumers and ensures  banks can continue to help families borrow money for college and help businesses invest in their companies and create jobs. Most importantly, the legislation revamps the regulatory structure to help prevent another crisis like the one we experienced last fall.

I think some key votes are left out of this story. For instance, the Congressman supported the Kanjorski Amendment, which gives regulators the power to break up firms that pose a systemic risk. He also voted in favor of requiring secured creditors to take a 10% reduction in payment when an institution in which they have invested fails. These are both critical to preventing the use of taxpayer dollars to bailout failed banks.