as the country approaches the three-year anniversary of
/frank, many of the laws designed to ensure a safer
are under siege.
passing this bill was no easy task. to get there we had to overcome the furious lobby of an array of powerful interest groups. a a partisan minority determined to block change. that doesn't mean or work is over. for these new rules --
the hurdles are only getting bigger. the
to date has spent over a billion trying to kill
/frank. last year the number of
lobbyists looking to gut the law's provisions outnumb bert
lobbyists by 20:1. is the banking are larger than ever. the four biggest hold 7.8 trillion in assets. half the size of the entire
. this month the
house financial services committee
quietly passed five bills. the "new york times" reports that one of those bills was written almost entirely by citigroup. citigroup's recommendations reflected in more than 70 lines of the
's 85-line bill. two crucial paragraphs were copied nearly word for word. lawmakers changed two words to make them plural. all of which led the
to conclude three years after the most comprehensive overhaul since the depression,
is finding weight a fredlier place. today roughly two thirds of the rules have yet to be put into effect. a testimony to the strength of the
lobbying power. in the meantime banks continue to sell the very same risky mortgages and loans that went back during the recession. speaking to the nation,
, a senior lecture you are summed up the current state of affairs -- it's like a horrid or movie. you can't be too triumphant just because the first blowing had the beast weakened. joining us is former congressman and co-author of the
street reform and
. thank you for joining us.
congressman, i have to ask, after all the work put into
/frank, are you satisfied with how implementation is going in congress?
no, but it is doing better than frankly, you said, they are not selling the same products. the single biggest problem we had in the earlier period we are mortgages being sold to people who couldn't possibly repay them because the mortgages were sold and then securitized. the bill specifically prohibited that. that's being enforced. you do not have the kind of irresponsible mortgages going forward. there's much greater capital. i am disappointed and there are two factors that don't often get mentioned. we did not anticipate when we passed the bill that the republicans were going to take over the
house of representatives
. the agency that got the greatest increase in power under our legislation -- well, the one that got the greatest increase was the consumer financial protection bureau, which we set up, which is working well, and that agency is doing a very good job and is totally resistant to efforts to undercut it. the derivatives, a serious problem leading up to the crisis, we gave great power to regulate them to the commodities future trading commission. unfortunately when the republicans took over in
, they refused to fund that adequately, the
commodity futures trading commission
has the major source of new power over former derivatives called swaps. they have been doing a good job.
is a tough, effective regulator. he's making progress, but the progress has been slow, because the republicans have refused to fund it. by the way, we're talking about amounts in maybe $100 million. not amounts that have a tremendous budget impact the way syrian intervention would, back to your last comment. secondly the people have read that the president is trying to get judges appointed to the
district of columbia
. that's the court to which all cases challenging
go. the filibuster has been used to keep
from appointing judges there. so you have the agencies in a double bind. first they don't get enough money, not because they're trying to save money, but because they're trying to cripple the regulation. secondly this very conservative courts tells the agency oh no, we don't like this rule, you have to go back and do more work. one example, the agency under the power in our bill said we want to stop speculation, so they put a limit on how many of a commodity you could buy through a derivative if you didn't use it. you know,
have to buy oil.
have to buy fuel. there's a limit on the extent to which you can buy. the court ruled it out. they said the legislature didn't mean it, but we did mean it. so i'm somewhat disappointed. i think more progress is being made, and i'm confident of this. we will have a good set of rules in play. all this is not going anywhere. so i think it's been slowed down by an ideological
. ironically the conservatives don't like activism unless they practice it. there's a lot to unpack there. first, the
d.c. circuit court
, just yesterday they were accusing the president by simly trying to fill rakances.
i'm a great believer of -- i -- if i could ban some things, i would ban that kind of outrageous misuse of language. parking the court is when roosevelt sought to expand the number of justices. what the president is doing is doing a constitutional job. you the problem, of course, is -- so they're -- i'm glad you cited that, they are illegitimately trying to use the filibuster, and i hope they overrule that, as they're entitled to do, that they say we're going to confirm judges. in the first place they're not giving enough money to go through the rules and the, with more work and they don't have to do it. you know i want to bring in the folks we have in new york. josh, the cftc. the nation talks about how
has defanged -- and they're among the noisy -- to soften the driverty rules. which brings to mind a larger question about regulation, and oversight, and any kind of reform here.
i think it's inevitable. whenever you have something complicated like financial reform, elf this dance, where a lot of the people who know the industry and can figure out how to regulate it are people with experience in the industry.
spent 16th years result
and generally is well respected.
you see that as a necessary precondition to actual regulation?
can i give an example here? from
got congress to set up the
securities exchange commission
, similar problems, similar complaints. he picked to be the first head of the s.e.c. a man who had been deeply engaged in the industry and whoic a knowledged he had been engaged in the practices that were being banned. he was picket precisely because he would be effective in stopping them. he said, i know all the tricks, and his name, by the way, was
joseph p. kennedy
i think you look at that standards, the four largest banks, holding 7.8 trillion, and we talked about too big to fail. i think that's a terrifying prospect. in fares they got bigger, because the
asked them to. it was the
that said to
, please don't let them fail, that had cause a problem, take them over. secondly, the critical statistic here is not whether they're big, but how well regulated they are. they are much better capitalized than they were before. finally, and this is it is most important point, we changed the law so the
cannot now provide aid to these institutions if they are in trouble and keep them alive.
was half right. we put in death panels for large
. under the law, no money can be used to help pay off the debts of these institutions until they're first abolished.
barney, you and i have debated this issue before. i agree that
/frank has clearly helped and made things better for now. my great worry is if and when, and there will be a when, when a bank gets into trouble. it's likely at some point, i'm not saying tomorrow. when that moment happens, what worries me most is in washington when the markets are falling apart, your death panel, if you will, won't be used, meaning people will say, we never tried this before, we don't know if it actually works and therefore we'll
at the problem all over again. that is my great worry.
i have to say, i have never heard a more serious misreading of the american political move. i don't know what it will be like 20 years from now, but if a bank failed now, i don't know that there would be any support. one of the great regulator we ever have, they have experience, but what happens is some of the -- so the debts get paid.
but they're supposed to be paid by the other banks.
they will be.
when the you know what is hitting the --
no, it does not mean that. two mistakes there. first of all, it does not necessarily mean they will all go under at the same time. if in fact, step in and stop it with one, it may start with the other. secondly they are paid back
with institutions with more than $50 billion in assets. no congressional action is needed. they pay some of the debts and then
congressman, i'm so sorry, we really do have to leave it there. i invite you back on many, many more times, as many as you will come on. this is obviously a continuing conversation. the three-year anniversary is this summer, we would love to have you back. thank you.
maybe with more time.
next time you can have the whole show. we'll have more after the break. i