Hoyer Confident Dems Will Win Back House In 2012

House Minority Whip Steny Hoyer (D-Md.) told reporters Tuesday that he remains confident Democrats will take back the House in next years election, despite having lost some notable members like Rep. Barney Frank (D-Mass.) to retirement. 

The recently announced vacancies of 17 House Democratic seats, including Frank and Texas Democrat Charlie Gonzalez who chairs the Congressional Hispanic Caucus, could be seen as cause for concern over Democrats’ ability to win big next November, especially with the increased number redrawn districts in many states across the country. 

Fewer Democrats, however, have made their decision not to seek re-election compared to the 23 House Republicans who left Congress following the 2008 election cycle when Democrats regained control of the lower chamber. The numbers could indicate to Democratic leadership that the enthusiasm and potential may still be alive for 2012, Hoyer said.

“We have less retirement now than we had in ‘94 [and] I don’t think this will adversely effect, in any way, Democrats’ ability to take back the House,” Hoyer told reporters. “I fully expect us to take back the House.”

Frank said that he himself is confident Democrats will take back the House, especially if the newest front-runner, former House Speaker Newt Gingrich, becomes the nominee.  

“The answer is I don’t know, I don’t think anybody know,” Frank said about the potential for Democrats to win back the House in 2012. “Is Newt Gingrich going to be the Nominee? Then we win it back.”

House Financial Services Committee To Start Markup Of Systematic Risk Bill Wednesday

By Meagan Wiseley - University of New Mexico/Talk Radio News Service

Chairman of the House Financial Services Committee Barney Frank (D-Mass.) told reporters at a press conference Tuesday that debate and markup of the Investor Protection Act will begin Wednesday and markup of other systematic risk legislation will follow.

“We will start the markup...beginning tomorrow, and everyday that the House is in session until we finish,” Frank said.

Following the consideration of the Investor Protection Act of 2009, the committee will begin markups of the Federal Insurance Office Act of 2009, the Financial Stability Improvement Act of 2009 and the Overdraft Protection Act.

Frank added that he expects aspects of the larger financial regulatory reform legislation, including the creation of the Consumer Financial Protection Agency, to be voted on by December.

“The earliest we can get to the floor will be the first week in December,” Frank said.

Geithner Endorses Frank's Proposal On Future Bailouts

By Ravi Bhatia - Talk Radio News Service

During testimony given before the House Financial Services Committee Thursday, Treasury Secretary Timothy Geithner echoed the White House's support for Committee Chairman Rep. Barney Frank’s (D-Mass.) proposal that would grant the Federal government the authority to take control of failing financial firms.

Frank's legislation would create a fund paid for by businesses with over $10 billion in assets in order to bear the costs of big firms that fail. Such costs were incurred by American taxpayers in the 2008 bailouts of banking company Citigroup and General Motors. It would also create a Financial Oversight Council, led by Geithner, to set policy and stricter regulations on the firms, and mediate arguments between federal agencies.

“It’s not about redemption for the firms that make mistakes,” Geithner said. “It’s about unwinding them in a way that doesn’t cause catastrophic damage to the economy.”

The Committee will vote on the legislation as early as next week. The committee's Ranking Republican, Spencer Bachus (R-Ala.), opposed the legislation and the speed at which it is being pushed.

“The draft legislation that was supposed to be the subject of this hearing was not received until Tuesday afternoon,” he said. “I doubt that any of today's witnesses, with the possible exception of Secretary Geithner, have had the opportunity to fully comprehend the legislation entirely.”

“Their proposal places taxpayers first in line to bear the losses when the government invokes its resolution authority," added Bachus.

In a statement released before her testimony on Thursday, Federal Deposit Insurance Corporation Chairman Sheila Bair said that the proposed Oversight Council lacks the authority to “effectively address systemic risks.” She recommended that the President appoint an independent chairman, subject to Senate confirmation, to fill the role Geithner would otherwise.

“A Council with regulatory agency participation will provide for an appropriate system of checks and balances to ensure that decisions reflect the various interests of public and private stakeholders,” Blair said.

Geithner said that he believes Frank’s bill will update the federal government’s financial regulatory system to match what he called, “21st century” challenges.

“The Council will have the obligation and the authority to identify any firm whose size in leverage and complexity creates a risk to the system as a whole and needs to be subject to heightened, stronger standards on leverage,” he said. “The rules in place today are inadequate and they are outdated. We’ve all seen what happens when in a crisis, the government is left with inadequate tools to respond.... That is a searing lesson of last Fall.”

Republicans Concerned About Proposed Consumer Finance Protection Agency

By Ravi Bhatia-Talk Radio News Service

House Minority Whip Eric Cantor (R-Va.) and other Republican Congressmen delivered statements today at the U.S. Capitol opposing the proposed Consumer Finance Protection Agency.

The bill that would lead to its establishment, pushed by House Financial Services Committee Chairman Barney Frank (D-Mass.), would create an agency to oversee nearly all facets of consumer lending. The Committee will vote on the bill by the end of the week.

“Increased government regulation isn’t always the answer,” Cantor said. “We need, perhaps, smart regulation, but more [isn’t always] the right solution.”

Supporters of the bill say that the agency will pull together consumer oversight powers scattered among various agencies, making consumer interests a higher priority.

“The new Consumer Financial Protection Agency that I've asked Congress to create will have just one mission:  to look out for the financial interests of ordinary Americans,” said President Barack Obama in a statement released Oct. 9. “It will be charged with setting clear rules of the road for consumers and banks, and it will be able to enforce those rules across the board.”

However, the Republicans at today's briefing are concerned that the agency will concentrate too much power into one organization, or possibly even one person.

“What has been proposed by the Democrats is a new consumer finance rationing and design authority,” said Spencer Bachus (R-Ala.), ranking member of the House Financial Services Committee. “It gives one person - a credit rationing czar - the right to make all types of decisions. Of all the losers, the greatest loser, if this legislation passes, is going to be small business, because small business [is already] having trouble getting financing.”

UPDATE: By a tally of 32-29, the House Financial Services Committee voted to approve the Consumer Financial Protection Agency on Thursday.

Consumer Protection Activists Request Rejection Of Amendment To Financial Regulatory Bill

By Meagan Wiseley - University of New Mexico/Talk Radio News Service

The Americans for Financial Reform said today they are urging the House Financial Services Committee to reject an amendment that will be proposed by Rep. John Campbell (R-Calif.) to exemplify auto dealers loan financing from the Consumer Financial Protection Agency.

In a conference call Tuesday, President of Consumers for Auto Reliability and Safety Rosemary Shahan said, “the majority of car dealer profits are from the finance and insurance departments, which are much less transparent. Finance managers are paid on commission and their incentive is to maximize profits from the financing and the add ons.”

Shahan said one tactic used by some auto dealers is "yo-yo financing," wherein the dealer will offer a reasonable and competitive interest rate, then switch to a much higher rate and force the consumer to resign a new contract with the higher interest rate.

“If [the consumer] doesn’t want that rate, [the dealer] will threaten to report the car as stolen or put pressure on the consumer to sign another contract with worse terms,” said Shahan.

Shahan also said this financing tactic is more frequently directed towards African Americans and Latinos.

The House Financial Services Committee began the markup of the The Consumer Financial Protection Agency bill last week, and continued through Tuesday. The bill was introduced to the House by Financial Services Committee Chairman Barney Frank (D-Mass.) on July 9, 2009.

In a statement, Frank said, “I am confident that we will produce a bill that will provide greater consumer protections while in no way burdening the legitimate activities of responsible banking.”