With the election merely days away, this series of blog postings will provide a policy comparison between Mr. Moran and those I would like to implement. For Part 1 of this series, click here.
Like his legislative colleagues who share in the all-time low approval rating, Mr. Moran has T.R.I.E.D. on - Traffic, Regulation, Immigration, Economy and Debt – critical issues but unfortunately failed. Passionate partisanship has painted many politicians into a political corner. As a country we are better when we embrace ideas rather than ideology, innovation rather than dogma. I am running as an Independent to take responsibility for our biggest challenges. Regulation, specifically financial regulation, is one issue I will tackle during my first term.
A refrain that I have received from some voters in our district is that Mr. Moran “votes the right way.” On regulations that led to the financial crisis he did not. On regulations that will improve America’s financial sustainability, he has not.
Mr. Moran voted for the Financial Modernization Act of 1999 (Gramm-Leach-Bliley Act) which repealed the depression-era Banking Act of 1933 and led to the financial crisis of 2008. The 1933 Act preserved the American economy for nearly 70 years. The 1999 law “modernized” the financial industry and added complexity by allowing commercial and investment banks to operate as one company. Of course, 1999 was a different, nearly nostalgic time: the Euro officially entered the world markets on January 1st and Lance Armstrong won his first Tour de France on July 25th. Now the Euro is struggling and Lance Armstrong has had not one but all seven of his titles stripped. Mistakes were made.
The Financial Modernization Act was signed into law on November 12, 1999. This was merely a few months before the stock market bubble peaked and subsequently burst in the year 2000. It wasn’t until the end of 2007 that we began to see the negative effects of the newly complex financial industry. 2008’s financial collapse was preceded by the onslaught of complex financial instruments created by mega-banks and another bubble; this time in the housing industry.
In 2010 Mr. Moran voted for the Dodd-Frank Act to undo the damage done to our economy by his vote for the 1999 Financial Modernization Act.
The Dodd-Frank Act was supposed to stop big banks from doing bad things –like failing. Unfortunately, what it’s been better at is stopping small banks from doing good things –like lending. On September 13th of this year, the Government Accountability Office completed a report on the impact of Dodd-Frank implementation on community banks and credit unions. The report is 88 pages long but focuses on the 398 proposed rules required under Dodd-Frank. 398.
Smaller community banks and credit unions are unequally impacted by these new rules because they don’t have lots of lawyers and accountants to muddle through them all. Large banks like Citigroup are positioning themselves to take advantage of Dodd-Frank. I wrote about this earlier in October, the day after Citigroup CEO Vikram Pandit resigned.
In summary, Mr. Moran voted to repeal the 1933 Banking Act that protected us from another Great Depression and replaced it with the 1999 Financial Modernization Act that led us to a Great Recession. He then voted for the 2,000 page Dodd-Frank Act that is making small banks go away and big banks become "too bigger to fail." We must do better.
I will work to refine the Dodd-Frank legislation into a better bill: more clear and less demanding upon the community banks and credit unions that had little or nothing to do with the financial crisis of 2008. To slow relationship bank consolidations and the influence of the now “too bigger to fail,” I will work with other legislators to create criteria for smaller banks that allow exemptions from Dodd-Frank. Just recently Patch reported on the news that First Virginia Community Bank acquired First Commonwealth Bank of Virginia. Banks like John Marshall Bank headquartered in Falls Church, Virginia Commerce Bank headquartered in Arlington and Burke & Herbert in Alexandria, need to be preserved. We need to preserve them because what’s bad for small banks is bad for small business. What’s bad for small business is bad for our local economy.
Financial regulation is not easy work. It takes a commitment to get “into the weeds” of the issues and make nonpartisan decisions about difficult legislation. I will work through these decisions, likely on the House Financial Services Committee. I will join others to help deliver balance to the banking industry and health to our economy.
We can do better than has been done with financial regulation and during my first term we will do better.
For more information about our campaign, please visit VoteJasonHowell.com