Clinton's banking Buddy Kaine

SUBHEAD: Kaine signs letter to help big banks dodge risk management rules, and small banks avoid consumer protection.

By Zach Carter on 20 July 2016 for Huffington Post  -

Image above: Looks like Kaine is taking selfie with Hillary Clinton at a recent Virginia rally. From original article).

Sen. Tim Kaine (D-Va.) is on Hillary Clinton’s short list of potential vice presidential nominees. He’s also actively pushing bank deregulation this week as he campaigns for the job.

Kaine signed two letters on Monday urging federal regulators to go easy on banks ― one to help big banks dodge risk management rules, and another to help small banks avoid consumer protection standards.

Presumptive Democratic presidential nominee Hillary Clinton is believed to be weighing Kaine among a handful of other potential VP choices. Her pick is widely viewed in Washington as a sign of her governing intentions. The former secretary of state has spent weeks attempting to woo progressive supporters of vanquished primary challenger Sen. Bernie Sanders (I-Vt.).

Choosing from one of the handful of names on her short list ― Sens. Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio) or Jeff Merkley (D-Ore.), for instance ― would signal that her camp is taking progressive concerns seriously.

Kaine, by contrast, is setting himself up as a figure willing to do battle with the progressive wing of the party. He has championed the Trans-Pacific Partnership trade deal that both Sanders and Warren oppose, and he is now publicly siding with bank deregulation advocates at the height of Clinton’s veepstakes.

The big bank letter would help major firms including Capital One, PNC Bank and U.S. Bank, all of which control hundreds of billions of dollars in assets. Such large “regional banks,” Kaine writes, are being discriminated against based solely on the fact that they are so big. 

In a letter to Federal Reserve Chair Janet Yellen, Comptroller of the Currency Thomas Curry and FDIC Chair Martin Gruenberg, Kaine argues that it is unfair for these large banks to be required to calculate and report their liquidity ― a critical measure of risk ― on a daily basis. Kaine wants to change that reporting to once a month. Kaine, along with Sens. Mark Warner (D-Va.), Gary Peters (D-Mich.) and Robert Casey (D-Pa.), argues that bigger banks don’t necessarily carry bigger risks, and thus shouldn’t face more aggressive oversight. 

“This distinction is applied unevenly across regional institutions despite similar risk profiles, simply by virtue of an asset threshold,” the letter reads. Translation: just because they’re big, doesn’t mean they should be regulated more closely.

Kaine and his coauthors do draw an exception to this principle for “systemically important” banks ― a term that usually means the six largest banks in the country: JPMorgan Chase, Bank of America, Goldman Sachs, Morgan Stanley, Wells Fargo and Citigroup. These should be regulated closely. Firms controlling over $400 billion, not so much.

On the small bank side, Kaine pressed Consumer Financial Protection Bureau Director Richard Cordray to exempt “community banks and credit unions” from new rules. Doing so would leave these institutions, which include banks with up to $10 billion in assets, more lightly regulated than they were before the financial crisis. The letter, sent on Monday, was signed by 69 other senators.

Small banks were not, for the most part, involved in the subprime mortgage crisis. But many commit other consumer protection abuses. These violations do not spark massive financial downturns, but they can be real problems for the households that get ripped off. 

As Kaine joins the deregulatory fight, several other lawmakers are pushing the CFPB in the opposite direction. On Wednesday, 28 senators sent a letter to the agency urging them to toughen up their new rule against abusive payday lending. Kaine didn’t sign it.

A spokesperson for Kaine told HuffPost that Kaine is working on his own separate “Virginia-focused” letter on payday lending in support of the CFPB rule that he hopes will come out before the election.

 Kaine signals support for banks
 SUBHEAD: How Tim Kaine is signaling that he'll be 'an asset with banking interests on the fundraising trail'

By Deidre Fulton on 21 July 2016 for Common Dreams -

Sounding another alarm for progressives wary of the Democratic establishment's support for Wall Street, the man said to be leading the pack of potential Hillary Clinton running mates—Virginia Sen. Tim Kaine—has just this week sent a clear message to big banks: He's in their corner.

Kaine, who is reportedly Bill Clinton's favorite for the vice presidential slot, signed onto two letters on Monday pushing for financial deregulation—letters that show the Clinton camp "how Kaine could be an asset with banking interests on the fundraising trail," according to David Dayen at The Intercept on Wednesday.

The news should "disqualify" Kaine from the ticket, one prominent progressive group declared Thursday.

The first missive, signed by 16 Democrats and every Republican senator, calls on the Consumer Financial Protection Bureau (CFPB) to exempt community banks and credit unions from certain regulations.

As Dayen explains:
While this seems benign, tailoring rules that exempt large classes of financial institutions leaves consumers vulnerable to deceptive practices. A rule of this type could allow community banks and credit unions to sell high-risk mortgages or personal loans without the disclosure and ability to pay rules in place across the industry.
The second letter (pdf) deals with even bigger regional institutions, as it is aimed at helping "major firms including Capital One, PNC Bank and U.S. Bank, all of which control hundreds of billions of dollars in assets," according to the Huffington Post

Signed by Kaine and three other Democratic senators—Mark Warner (Va.), Gary Peters (Mich.), and Bob Casey (Pa.)—the letter to Federal Reserve Chair Janet Yellen, Comptroller of the Currency Thomas Curry, and Federal Deposit Insurance Corporation chair Martin Gruenberg "argues that it is unfair for these large banks to be required to calculate and report their liquidity―a critical measure of risk―on a daily basis," HuffPo's Zach Carter continues. 

"This distinction is applied unevenly across regional institutions despite similar risk profiles, simply by virtue of an asset threshold," the letter reads.

Or, as Carter puts it, translating the senators' bottom line: "just because they're big, doesn't mean they should be regulated more closely."

But in fact, Dayen points out, "[i]n an interconnected financial system, a large regional bank that gets into trouble has as much chance of creating ripple effects as a mega-bank. It's unclear why they should be exempted from regulations deemed appropriate for all facets of the financial sector."

On top of these salvos on behalf of the banking industry, the Huffington Post notes that Kaine did not sign onto a third letter sent Wednesday from 28 senators urging the CFPB to crack down on abusive payday lenders and in turn, protect consumers.

That all this took place while Kaine is presumably being vetted for VP "could show potential financial industry donors that he is willing to serve as an ally on their regulatory issues," Dayen wrote, especially because Clinton has been pushed to the left by Bernie Sanders on Wall Street.

Given existing concerns around Kaine's support for the Trans Pacific Partnership and other so-called "free trade" deals, plus his mixed record on reproductive rights and now new proof of his bending to bankers, it's no wonder RootsAction co-founder and Bernie Sanders delegate Norman Solomon told Common Dreams on Wednesday that choosing the Virginia senator or someone like him "would be a very pronounced middle finger to the 13 million people who voted for Bernie."

Indeed, in a press statement on Thursday, critics of the Democratic Party's superdelegate system said Kaine's position at the top of the VP list provides "a perfect example of why the party needs to create policies and pick candidates who reflect the will of the voters, not the will of elites and special interests that the superdelegate system has come to embody."

"Superdelegates are the embodiment of a system that is rigged in favor of the powerful at the expense of the powerless," said Maine state representative Diane Russell, who originated an amendment to abolish superdelegates that will be taken up by the DNC Rules Committee on Saturday, "and there isn't a more powerful industry in America than the big banks."

And Democracy for America executive director Charles Chamberlain said in a statement Thursday:
"Let's be really clear: It should be disqualifying for any potential Democratic vice presidential candidate to be part of a lobbyist-driven effort to help banks dodge consumer protection standards and regulations designed to prevent banks from destroying our economy."

See also:
Ea O Ka Aina: Clinton's GMO buddy Valsack 7/20/16


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