Banks Still Own Congress

Democrats are getting ready to join Republicans in support of a bill to water down the Dodd-Frank banking regulations passed after the 2008 financial crisis:

Congress’s appetite for pulling back bank regulations shows the renewed clout of the financial sector in Washington, not just in the GOP but also among Democrats. Eight years after nearly every Senate Democrat backed a sweeping set of new rules for financial firms large and small, the party is now split, with moderates, several of them facing tough midterm election contests, working with the opposing party.

The core of the new bill exempts about two dozen financial companies with assets between $50 billion and $250 billion from the highest levels of scrutiny by the Federal Reserve, the nation’s central bank. Supporters argue that the legislation would bring much-needed relief to midsize and regional banks that were treated like their much larger counterparts under the 2010 legislation known as Dodd-Frank. Opponents say it would weaken the oversight needed to stave off the type of dangerous lending and investing that brought the U.S. economy to its knees.

It’s all about the poor community banks! And yet, I was curious. Just how are community banks doing these days? At great expense, the research team here at Mother Jones clicked a few links to retrieve Fed data on bank performance. Here it is:

I am just a humble blogger with no experience in the mighty financial industry, but it sure looks to me as if banks are doing fine. It also looks to me as if community banks are doing about as well as the big banks. Sure, they took a hit in the 4th quarter of 2017, but that was due to one-time writedowns on deferred tax assets prompted by the new Republican tax legislation. They’ll make it all up and more thanks to lower tax rates going forward.

Now, tell me again why we need to loosen the rules on banks?

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THE BIG PICTURE

You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

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