Barney Frank (D-Fannie Mae) is king of the banking business.
He’s got the kind of clout that only money can buy. That’s why he was able to shield mortgage giants Fannie Mae and Freddie Mac during his tenure as Chair of the House Banking Committee.
Being a House banking member has always had its rewards. While still a junior member on the House Banking Committee in 1991 he secured a big-time job at Fannie Mae for his then-husband. Or was it his wife? OK, let’s not go there.
But Frank has definitely moved on to bigger things. His new husband is a surfer. Oops. I just went there.
He’s also now the author of a banking reform bill known as “Dodd-Frank,” which has the distinction of being some of the most costly legislation ever written.
How costly? We just don’t know yet. But besides the $3 billion that the legislation will cost to implement a story in the Atlantic, hardly a right-wing mouthpiece, estimates that the costs could approach $1 trillion.
Oh, and it also failed to address the “too-big-to-fail” syndrome that put the country’s real estate market in the mess it finds itself in… which was the point of Dodd-Frank to start with.
Gotta love the Democrats when they pass laws that don’t even attempt to solve the problems the laws were intended to address in the first place.
If they solved problems then they wouldn’t get to write the outrage letters.
Because Frank has written an outrage letter asking that the Federal Reserve hold up the merger of Capital One and ING.
Capitol One was the high bidder in the forced sale of ING’s banking division. The sale of the division was a condition of a European bailout of ING’s parent company.
A disappointed bidder in the deal was Obama favorite, GE Capital.
Capital One outbid rival GE to secure the coveted ING retail banking business that Capital One says will help reduce the amount of risk they have because it adds more direct banking and less credit risk. But still any suitor had to be willing to take on the additional mortgage risk in the ING portfolio, which apparently, Capital One was willing to do this while the other suitors, reportedly, were not.
Frank and his liberal friends have a powerful reason to be outraged by the deal: GE donated $3.2 million to Democrats during the 2008 and 2010 election cycles, far more than they donated to the GOP.
“In a letter sent on Wednesday to Ben Bernanke, the chairman of the Federal Reserve, Mr. Frank, Democrat of Massachusetts, called on the Fed to hold public hearings to examine the possible deal’s impact on consumers and the economy,” writes the NYT’s Deal Book. “Mr. Frank also asked that the Fed grant the public at least two additional months to weigh in on the acquisition. The comment period is otherwise scheduled to end on Thursday.”
“This proposed purchase would create the fifth-largest bank in the United States,” said Mr. Frank, according to the Times article. “For this reason alone, care should be taken to thoroughly examine the impact of this purchase with respect to the consolidation of banking assets, the provision of credit by the resulting bank and compliance with the Community Reinvestment Act.”
The Times also cites a consumer advocate who opposes the deal: “We already have four too-big-to-fail banks, why make a fifth?” said John Taylor, president of the National Community Reinvestment Coalition.
Why indeed? I thought at $3 billion to implement, Dodd-Frank was supposed to solve the too-big-to-fail problem.
At the same time Democrats are calling for the merger of Fannie Mae and Freddie Mac to marry the king and queen of too-big-to-fail into one uber-mortgage failure sponsored by the government and managed by Congress.
Democrats have powerful reasons for doing that deal, just as they have for holding up the merger of Capital One-ING. Fannie Mae gave Democrats over $1 million in contributions in the 2006-2008 election cycles.
And let’s face it: $4.2 million in contributions is way too big to fail.
via Barney Frank, Czar of His Domain.
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