(Grover Norquist) – As we wait for the final text of the Frank-Dodd financial “reform” legislation from the Conference Committee, Americans for Tax Reform continues to urge members to vote against this expensive, dangerous, and ineffectual bill. ATR considers the following reasons as enough individually to justify voting against the bill:
* Whereas bank regulators and the SEC failed to avert the mortgage crisis or monitor crucial firms like Bear Stearns and Lehman Brothers, this bill doubles their power and their budgets.
* The infamous “Durbin amendment” allowing regulation of debit-card interchange fees remains in the legislation to the detriment of bank customers and shareholders. Nationwide announcements of the end of fee-free checking showcase the effects of the provision. Moreover, government officials would have access to records of every individual transaction.
* Too big to fail is now here to stay, for the Federal Reserve, with the consent of the Treasury Secretary) retains the power to bail out firms, so long as it bails out similar firms as well, yet if only one firm in a category requests a bailout while its competitors managed their risk wisely, the Treasury has the prerogative to bail them out.
* Even though Fannie and Freddie are some of the biggest recipients of TARP funds and presently hold trillions of toxic assets guaranteed by US taxpayers, they escaped mention in the bill entirely. Instead, the bill punishes private-sector banks, most of which have paid back much or all of their TARP funds.
* The new SEC powers allow regulators to play favorites in selectively permitting shareholders to appoint directors via a proxy vote and could politicize the corporate selection process.
* While the Volcker Rule will decrease the risk present in the system, it likewise decreases the profitability of financial services companies for their shareholders, and it provides yet more incentives for firms to shift operations to financial centers abroad with environments more conducive to profits.
* The new Consumer Financial Protection Agency (CFPA) will have no Congressional oversight, full rule-writing authority, and no obligation to consider the safety and soundness of the banks whose products it would affect, much as Fannie and Freddie have no obligation to consider their own safety and soundness.
* Conference committee Democrats added an eleventh-hour $19 billion bank tax that can affect firms with more than $50 billion in assets (excluding banks that have deposit insurance, and Fannie and Freddie or any government-sponsored enterprise) and hedge funds that manage more than $10 billion, but the specific determination lies with the regulators. So, the provision punishes companies that have done well and thus attracted capital and further limits access to credit for small businesses.
The American people are looking to Congress to provide leadership on economic issues to lead the US into a period of growth and recovery, and this legislation offers precisely the wrong way to stimulate such growth. For these reasons, I urge you to vote against this fundamentally flawed legislation. Contact Brian Johnson in my office at email@example.com for more information.
(Mr. Norquist is president of Americans for Tax Reform)