Democrats fail to mend split over rolling back Dodd-Frank financial regulations

Jim Puzzanghera, Los Angeles Times on

Published in Business News

WASHINGTON -- In the span of two hours on Capitol Hill Tuesday, the sharp split between liberal and moderate Senate Democrats on a major bank deregulation bill became crystal clear.

First, Sen. Elizabeth Warren, D-Mass., stood before TV cameras to complain that the legislation, which is focused on helping small and midsized banks, will put "American consumers at greater risk" because it also loosens rules on larger financial institutions.

"Telling a bank that's a quarter of a trillion dollars (in assets) that it can be regulated like some tiny, little community bank makes no sense at all," she said, vowing to fight to amend the bill or halt its passage.

A short time later, four moderate Democrats sat down with reporters to explain their decision to co-sponsor what they described as sensible revisions to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

"This a pretty carefully crafted bill ... where Wall Street does not get the benefits, where it really is focused on small and midsized banks, and I think it's the right direction to move at his moment in time," said Sen. John Tester, D-Mont.

Then they and their colleagues all hustled to the Senate floor to cast a key procedural vote on the legislation, which, if enacted, would be the most significant rollback of bank regulations since the 2008 financial crisis.

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The bill advanced 67-32, likely clearing the way for the Senate to pass the bill this week or next, which would move it on to the House.

All Republicans supported the bill. They were joined by 16 Democrats and one independent, Angus King of Maine, who usually votes with the party.

The rest of the Democratic caucus, including California Sens. Dianne Feinstein and Kamala Harris, voted against moving the bill forward.

"I'm not for monkeying with Dodd-Frank," Feinstein said after the vote, recalling how close the financial system came to collapse in 2008. "I think people who weren't here maybe underestimate how close we came to a real meltdown."


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