Banks' Favorite Dem Set To Chair Banking Committee

UPDATE -- The decision by Banking Committee Chairman Chris Dodd (D-Conn.) to decline to run for re-election raises the possibility that Sen. Tim Johnson (D-S.D.) will ascend to the position. That scenario, which frightens consumer advocates and delights the financial industry, was avoided in the late summer when Dodd declined to take over the health committee and stayed put at banking. We wrote the story below at the time.

Johnson is next in line to take the gavel, but there is pressure from progressives to lift up the third-ranking Democrat, Sen. Jack Reed of Rhode Island, who has a long track record of advocating on behalf of consumers. Reed, however, is not aggressively going after the position, at least not publicly, according to a statement from his office. "Senator Johnson is next in line to assume the chairmanship. He has been an active member of the Banking Committee and an outstanding advocate for the people of South Dakota and Senator Reed looks forward to continuing to work with him," said Chip Unruh, press secretary to Reed.

But he's also not ruling it out. Reading between the lines of the statement, note that it only includes stipulated facts and stops short of endorsing him for the chairmanship.

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If Senator Tim Johnson ascends to the chairmanship of the Senate Banking Committee, the biggest winners will be Wall Street, pay-day lenders and credit card companies. The biggest losers: widows and orphans.

No, really.

In late 2006, the South Dakotan spoke out against an effort by his fellow Democrats to cap the interest rates that members of the military pay for short-term loans. "This time it's military. Who's to say it isn't going to be widows and orphans or other sympathetic groups in the future?" he griped in an interview with the American Banker.

That's the man who's next in line to lead the Banking Committee if the current chair, Sen. Chris Dodd (D-Conn.), as expected, vacates the position to take the Health, Education, Labor and Pensions Committee chair left empty by the death of Ted Kennedy.

Meanwhile, Democrats are hoping to push through the most sweeping financial regulations in a generation, including the creation of a government panel that would regulate financial products with an eye toward consumer protection. All of that will have to go through the Banking Committee.

Story continues below
http://www.huffingtonpost.com/2009/09/01/banks-favorite-dem-set-to_n_273237.html

As chairman, he can prevent any reform from moving forward. And I suspect he probably will.