Should wealthy campaign contributors be able to get laws passed through Congress that only benefit their own companies? A piece of legislation that recently passed through the House Financial Services Committee would do exactly that.
“A bill to amend the Dodd-Frank Wall Street Reform and Consumer Protection Act to adjust the date on which consolidated assets are determined for purposes of exempting certain instruments of smaller institutions from capital deductions” is actually a bill that would do nothing more than keep Emigrant Bank of New York from losing $300 million in Tier 1 capital. The bill’s co-sponsors include Rep. Michael Grimm, Rep. Carolyn McCarthy, Rep. Gregory Meeks, and Rep. Carolyn Maloney – all of whom received at least $2,000 from Emigrant Bank owner Howard Milstein and his family.
Under the Collins Amendment to Dodd-Frank, banks above the $15 billion asset threshold cannot count trust-preferred securities towards their Tier 1 capital. Emigrant Bank was above the threshold for two years. The new legislation would change the effective date of the amendment to March 31, 2010, by which time the bank fell below the threshold. Out of 7,307 banks in the nation only Emigrant would be affected by this legislation. In other words, the law would exempt one campaign donor’s bank from financial reform provided by the Dodd-Frank provision.
During the hearing on the bill – a hearing the bill’s co-sponsors attempted to avoid, and not all attended – Emigrant’s chief regulatory officer claimed failure to exempt the bank would result in less available credit to individual borrowers. “Cops, teachers, and firemen” were cited as those who would suffer if the bank were not exempted. This is the same claim fiscal conservatives make when arguing the wealthy should receive continued tax breaks: those at the top need more so they can support the regular people. Time after time, we’ve seen the world does not work that way. Legislation should directly support the working class instead of benefiting financial institutions in hopes that it will trickle down to the working class.
Many were angered when the banks were bailed out in 2008. We’re now witnessing an attempt to legislatively provide aid to a bank that doesn’t need saving. Emigrant currently has $10.5 billion in assets. The fact that Emigrant’s officer was questioned at the hearing about the impact the bill would have on Emigrant further highlights this legislation is catered to that one particular bank. I’m hopeful the bill will come under heavy public scrutiny before its vote on the House floor. We simply cannot afford more of this political irresponsibility.
Why Did Congress Help Out One N.Y. Bank? - abcnews.go.com
Campaign Contributions Stir Unease on Emigrant Bank Bill - americanbanker.com
Bill would give bank a $300M benefit - politico.com
What a Few Thousand Dollars Will Buy You in D.C. - wallstreetexaminer.com
Outrageous Corporate Earmarks Stage a Comeback - thefiscaltimes.com
New York’s Emigrant Savings Pushes Dodd-Frank Tweak - blogs.wsj.com